US sees decline in building permits, housing starts in January

WASHINGTON D.C.: Despite mortgage rates easing and improvements to homebuilder confidence, in January the number of US single-family homes being built declined.

However, these signs also indicate that the recession-hit housing market was close to stabilizing.

The Commerce Department said single-family housing starts, which account for most of the homebuilding market, declined by 4.3 percent to a seasonally adjusted annual rate of 841,000 units last month.

In January, single-family homebuilding tumbled 27.3 percent on a year-on-year basis, it added.

While higher mortgage rates have pushed the housing market into recession, there are signs that the worst is over for the housing market, which is the sector most affected by the Federal Reserve’s aggressive interest rate hikes.

Data from mortgage finance agency Freddie Mac showed that a 30-year fixed mortgage rate averages just over 6 percent, compared to the average of 7.08 percent in early November. Starts also declined 21.4 percent year-on-year.

Single-family building permits declined 1.8 percent to a rate of 718,000 units, while housing projects with five units or more increased 0.5 percent to a rate of 563,000 units. Building permits rose 0.1 percent overall to a rate of 1.339 million units.

The inventory of single-family housing under construction dropped by 1.1 percent to a rate of 752,000 units.