Housing Starts Near 21-Year High

A jump in starts on single-family housing pushed total U.S. housing starts to a nearly 21-year high in January, but other data released Wednesday were not as robust.

Home mortgage applications dipped last week and industrial production was flat in January as warm weather damped demand for heating and dragged down utilities output.

U.S. housing starts climbed 4.7% to a seasonally adjusted annual rate of 2.16 million units in January from an upwardly revised 2.06-million-unit pace a month earlier, the Commerce Department reported.

The January total marked the highest pace of housing starts since February 1984, when they hit a 2.26 million unit pace.

Wall Street had expected housing starts to decrease 4.3% to a 1.1.92-million-unit rate from the 2-million-unit rate initially reported for December.

“Boom would be the most appropriate word for these housing numbers,” said Patrick Fearon, economist at A.G. Edwards & Sons Inc. in St. Louis.

Single-family housing starts drove January’s gain, climbing 2.7% to a record 1.76-million-unit pace, the government said.

Permits for future groundbreaking, an indicator of builder confidence, rose 1.7% to a 2.11-million-unit pace in January from an upwardly revised 2.07-million-unit pace the previous month. Analysts had expected permits to decrease to a 1.995 million unit pace.

The Mortgage Bankers Assn. said its seasonally adjusted index of mortgage application activity decreased 0.5% to 732.3 in the week ended Friday, after rising 4.2% in the prior week survey.

U.S. industrial production was flat in January, but manufacturing output remained healthy, the Federal Reserve reported. Wall Street had forecast a 0.3% rise in overall output.