Overall housing starts fell 4.5% to a seasonally adjusted annual rate of 1.31 million units in January as elevated mortgage rates and high construction costs created ongoing challenges for builders. There are currently 752,000 single-family homes under construction, 4.8% lower than a year ago, but builder sentiment is on the rise.
Though many builders are expecting a turning point in the housing market in the final quarters of 2023, recent volatility in the 10-year Treasury rate signals more difficulty ahead, the National Association of Home Builders' Eye on Housing reports.
The January reading of 1.31 million starts is the number of housing units builders would begin if development kept this pace for the next 12 months. Within this overall number, single-family starts decreased 4.3% to an 841,000 seasonally adjusted annual rate. The three-month moving average (a useful gauge given recent volatility) edged down to 842,000 starts, as charted below. On a year-over-year basis, single-family housing starts are down 27.3% compared to January 2022.
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