Housing starts have mostly been rangebound since late 2022 as high prices and high mortgage rates dampen demand.
The Monthly New Residential Construction report for January 2025 shows housing did not get off to a good start for the year.
Building Permits
- Privately-owned housing units authorized by building permits in January were at a seasonally adjusted annual rate of 1,483,000. This is 0.1 percent above the revised December rate of 1,482,000, but is 1.7 percent below the January 2024 rate of 1,508,000.
- Single-family authorizations in January were at a rate of 996,000; this is virtually unchanged from the revised December figure of 996,000.
- Authorizations of units in buildings with five units or more were at a rate of 427,000 in January.
Housing Starts
- Privately-owned housing starts in January were at a seasonally adjusted annual rate of 1,366,000. This is 9.8 percent (±12.5 percent) below the revised December estimate of 1,515,000 and is 0.7 percent (±13.0 percent) below the January 2024 rate of 1,376,000.
- Single-family housing starts in January were at a rate of 993,000; this is 8.4 percent (±10.1 percent) below the revised December figure of 1,084,000.
- The January rate for units in buildings with five units or more was 355,000.
Housing Completions
- Privately-owned housing completions in January were at a seasonally adjusted annual rate of 1,651,000. This is 7.6 percent (±8.4 percent) above the revised December estimate of 1,534,000 and is 9.8 percent (±14.0 percent) above the January 2024 rate of 1,504,000.
- Single-family housing completions in January were at a rate of 982,000; this is 7.1 percent (±8.3 percent) above the revised December rate of 917,000.
- The January rate for units in buildings with five units or more was 652,000.
Note the huge margins of error in these numbers, up to 13 percentage points in starts and 14 percentage points in completions.
Housing Starts 1959-Present
Housing starts are well below where they were in January of 1959.
Housing Starts Single Family vs Multi-Family
Single Family vs Multi-Family Details
- Since late 2022, housing starts have been rangebound between a high of 1,583,000 and a low of 1,262,000. The mid-point would be 1,423,000 while the current number is 1,366,000.
- The overall stats masks relative outperformance of single-family starts over multi-family starts.
- Single-family starts have been in a choppy uptrend since November of 2022 while multi-family starts have been in a choppy downtrend in the same period.
The current average 30-year fixed-rate mortgage is 7.03 percent according to Mortgage News Daily. This is not a favorable rate.
Permits are down to 1,483,000 from a 1,915,000 in January 2022. That’s a decline of 29 percent.
Starts are down to 1,366,000 from a 1,828,000 in March 2022. That’s a decline of 33.8 percent.
Housing will remain in the doldrums until mortgage rates or home prices are significantly lower. And that does not appear to be any time soon.
NAHB Housing Sentiment Flounders, the Market Needs Lower Mortgage Rates
Yesterday, I noted NAHB Housing Sentiment Flounders, the Market Needs Lower Mortgage Rates
Homebuilder sentiment has been low since mid-2022. Buyer traffic is dismal.
The CPI Is Deeply Flawed and the Fed Feeds those Flaws
On February 17, I noted The CPI Is Deeply Flawed and the Fed Feeds those Flaws
The Fed makes horrendous policy decisions because it does not understand inflation.
The Fed has never considered home prices to be a part of inflation stats. It wrecked the market in those beliefs.
There is no easy way for the Fed to rectify its mistakes.
Hmm… I wonder if the lack of U.S. Taxpayer Money, had an impact on this? Nobody to pay the rent for free, changes the amount of renters that you may have. Better not build too many houses that will sit empty.
Adding in the cost of property taxes and property insurance makes buying a home almost impossible for those without significant assets.
January existing home sales data is out at Redfin. Nationally, prices are up 4% YoY. https://www.redfin.com/us-housing-market
Apparently the prices aren’t “too high” and the buyers are not “on strike” because both prices and sales are up nationally YoY.
In all the towns surrounding me in Mass., prices are up 10% or more YoY. Up 7-8% in the Hartford area.
Of course, people can still choose to be delusional and wait for those “millions of vacant houses” to come on the market “any day now” like a certain blogger keeps promising.
He’s laughing all the way to the bank getting eyeballs (ad revenue) because he’s telling his readers what they want to hear. Lies.
I disagree. That rate is normal from a historical perspective. The issue is the capital cost of housing in most areas. That’s the abnormal part.
https://www.bankrate.com/mortgages/historical-mortgage-rates/
It does beg a question though, if mortgage rates magically go down to 4% or lower, what will that do to the price of houses? There seems to be so much pent up demand that I doubt home prices drop. The other elephant in the room is the unsustainable cost of insurance, maintenance and other expenses like HOA.
My mortgage free home now has expenses larger than the original mortgage when I bought the home. Imagine that…
correct 7% is normal, not high. I remember 17% mortgages, that was high!
“That rate is normal from a historical perspective.”
Interest Rates Have Moved Back To Normal – But Not Prices – Prices Of Housing As Well As Everything We Need To Live On is In ‘Hyper-Inflation Mode.
Almost Everything Has Doubled.
Housing, Rent, Insurance, Property Taxes, Health Care, Groceries, Gasoline, Diesel, Vehicles, Utilities, Wood/Building Supplies, Etc.!
when do I get my check?
https://www.ntd.com/musk-trump-to-discuss-sending-us-taxpayers-5000-checks-using-doge-savings_1048601.html?utm_source=facebook&utm_medium=Social&utm_campaign=ntdtelevision
Is your Net worth under 100 million? Then never.
Maybe stop posting junky links, LOL!
dont expect much out of Trumps foreign blustering
https://www.npr.org/2025/02/18/nx-s1-5299952/trump-foreign-policy-richard-haass-russia
Leila Fadel : NPR
Inflation causes depression.
Wonder if this is a situation that delivers relatively stagnant RE prices for several years until prices catch “down” to reality and income? Being one of the youngest boomers means there’s no way I’d let go of a 3% mortgage and home, unless it’s pried from “My Cold Dead Fingers”?
I have been watching to see prices drop on Homes, Cars, Boats, Etc. As the party is officially over. Those with money, spend it, no matter what’s going on, for the most part. They only make up 10%-15% so that leaves a lot of sellers awaiting buyers, and we all know what that gives the buyers… Leverage!
Cost will fall on lots of items, as the companies must make money to survive, and especially if it’s close to, or already paid for. When people can no longer buy in large numbers, as in now, the prices drop, or the product sits. That’s not a good situation for the companies having to sell, but a great one for those that don’t have to buy…
Good points, re my refi a few years ago,there was no cash taken out, figuring we were in “bubblicious” times with artificially low cost of money, hence higher nominal prices…but what goes up, well, you know the story.
Getting rid of the illegal invaders will have a huge impact on the cost of housing…downward.
should also have a huge impact on what you pay for fruit, veg and flesh , carwashes and all the other jobs that are beneath US citizens….. upward
Goldy’s gonna get rich picking lettuce.
making America grate again.
one day at a time.
Big fat American says-“we are consumers, not workers”.
“Getting rid of the illegal invaders will have a huge impact”
Quit Bombing Their Countries = End of Illegal Immigration.
USAID – About Propaganda – Coups – Color Revolutions – Regime Change – BioWeapns.