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The U.S. Census Bureau and the U.S. Department of Housing and Urban Development has announced the Monthly New Residential Construction Report for January 2023.
Together, they announced the following new residential construction statistics for January 2023:
Building Permits
Privately‐owned housing units authorized by building permits in January were at a seasonally adjusted annual rate of 1,339,000. This is 0.1 percent above the revised December rate of 1,337,000, but is 27.3 percent below the January 2022 rate of 1,841,000. Single‐family authorizations in January were at a rate of 718,000; this is 1.8 percent below the revised December figure of 731,000. Authorizations of units in buildings with five units or more were at a rate of 563,000 in January.
“Homebuilder sentiment increased for the second consecutive month in February, with all three components of the index rising," said First American Deputy Chief Economist Odeta Kushi. "Conditions are still considered ‘poor’ overall, but the improvement signals that builders are feeling cautiously optimistic about the months to come.”
Housing Starts
Privately‐owned housing starts in January were at a seasonally adjusted annual rate of 1,309,000. This is 4.5% (±15.9%) below the revised December estimate of 1,371,000 and is 21.4% (±10.6%) below the January 2022 rate of 1,666,000. Single‐family housing starts in January were at a rate of 841,000; this is 4.3% (±16.4%) below the revised December figure of 879,000. The January rate for units in buildings with five units or more was 457,000.
“U.S. housing starts come in below consensus expectations at an annual pace of 1.31 million, 4.5% below the revised December estimate of 1.37 million and 21.4% below the January 2022 rate of 1.67 million," said Kushi. "Single‐family starts declined 4.3% compared with December.”
Housing Completions
Privately‐owned housing completions in January were at a seasonally adjusted annual rate of 1,406,000. This is 1.0% (±9.8%) above the revised December estimate of 1,392,000 and is 12.8% (±13.0%) above the January 2022 rate of 1,247,000.
“There remains a large backlog of single-family homes under construction, as builders have been hampered by supply-side headwinds from labor shortages and high construction material costs," said Kushi. "Those homes are not move-in ready and thus do not meaningfully contribute to the stock of livable homes.”
Kushi added, "But single-family housing completions increased 4.4% this month and are up 12% year-over-year. Single-family completions have outpaced housing starts since July 2022, and that will likely put some downward pressure on the numbers of single-family homes under construction in the months ahead.”
Single‐family housing completions in January were at a rate of 1,040,000; this is 4.4% (±10.4%) above the revised December rate of 996,000. The January rate for units in buildings with five units or more was 349,000.
“Builders still face a difficult market as affordability challenges and supply-side headwinds persist," said Kushi. "While mortgage rates have trended down over the last three months thanks to favorable inflation data, rates increased recently due to market expectations that inflation will persist, thereby requiring the Federal Reserve to remain restrictive for longer. Even so, builders are hoping that we're past the mortgage rate peak and can look for some mortgage rate stability in the months to come.”
The February report is scheduled for release on March 16, 2023.
To read the full report, including more data, charts and methodology, click here.
