U.S. housing starts fall in January 2021

After reporting a sharp increase in new residential construction in the U.S. in the previous month, the US Commerce Department released a report on Thursday showing housing starts pulled back by much more than expected in the month of January.

The Commerce Department said housing starts tumbled by 6.0% to an annual rate of 1.580 million in January after soaring by 8.2% to an upwardly revised rate of 1.680 million in December.

The upwardly revised rate seen in December reflected the highest annual rate of housing starts since September of 2006.

The steep drop in housing starts came as single-family starts plunged by 12.2% to a rate of 1.162 million, more than offsetting a 17.1% spike in multi-family starts to a rate of 418,000.

Meanwhile, the report also said building permits skyrocketed by 10.4% to an annual rate of 1.881 million in January after jumping by 4.2% to a revised rate of 1.704 million in December.

Building permits, an indicator of future housing demand, had been expected to slump by 1.8% to a rate of 1.678 million from the 1.709 million originally reported for the previous month.