Housing Starts in January Up a Record 29.6%

Housing starts, boosted by the warmest January on record, rebounded 29.6% for their biggest gain on record last month after falling to a seven-year low during December’s cold spell, the government said today.

The Commerce Department said new homes and apartments were built at a seasonally adjusted annual rate of 1.63 million units in January after slumping a revised 6.9% in December. Starts in December originally were reported to be down 7.9%.

The department said the January increase was the highest since housing starts were first recorded in 1959. It topped the previous record gain of 29.3% reached in July, 1982.

Analysts had expected a big jump in starts during January because of the contrast in weather from December.

Thomas Holloway, senior economist for the Mortgage Bankers Assn., also said the jump was weather-related.

“Levels like the ones we’re seeing here would indicate a housing boom, and there is just simply no fundamental reason to believe that is going on,” he said.

The National Oceanic and Atmospheric Administration said January temperatures were the warmest for that month since the government began keeping records 96 years ago. December was the fourth-coldest on record, it said.

Many analysts also expect starts this year to total about the same as 1989’s 1.37 million units because of the sluggish economy.

Construction of single-family homes rose 24.8% in January to an annual rate of 1.14 million units after falling 9.8% in December.

Apartment construction jumped 42.3% to an annual rate of 488,000 units after a revised 1.8% gain in December.

Applications for building permits, a barometer of future housing activity, jumped 26.7%, the highest gain since a 30% jump in June, 1980. Applications had risen 2.5% in December.