Housing Starts Jump in January

The pace of new home and apartment construction in January soared to its highest level in more than three decades as unseasonably warm weather allowed builders to break ground on more projects than expected, the government said Thursday.

Housing starts, a measure of new construction activity, jumped 14.6% in January from the previous month to a seasonally adjusted annual rate of 2.28 million homes and apartments, according to the Commerce Department. Last month’s rate of new construction was the highest since March 1973, according to Associated Press.

In addition, new building permits, an indication of future construction activity, rose 6.8% in January from the previous month to a seasonally adjusted annual rate of 2.22 million homes and apartments.

But industry analysts warned that the much-stronger-than-expected results in January were temporary and that most other economic reports pointed to a continued slowing in the housing market. For example, mortgage rates have been rising from record lows, and sales of new and existing properties have begun to moderate nationwide.

“Unseasonably mild weather in January, coming after unseasonably severe weather in December, generated a huge increase in housing starts,” said economist Steven Wood in a report for Insight Economics. “Moreover, February’s weather is likely to generate a big decline in housing activity next month.”

Unusually warm and dry weather in January had the biggest effect in the Northeast and Midwest, where construction normally goes virtually dormant during the winter months. In the Northeast, construction starts soared 29.2%, and the Midwest posted a 23.7% gain. Housing starts rose 16.9% in the West and 8.7% in the South.

In other economic news, the Labor Department reported that new unemployment claims for the week ended Feb. 11 rose by 19,000 from the previous week to a seasonally adjusted 297,000 claims. The increase was larger than many analysts had expected but remained at relatively low levels.

The increase pushed the four-week moving average of initial claims, which smooths weekly volatility to provide a better sense of job market conditions, up by 6,250 to 283,000.

Though the rise in claims in the latest week brought them to the highest level since the first week of the year, the overall level suggested that the labor market was still robust.

A separate report from the Labor Department showed that U.S. import prices climbed an unexpectedly steep 1.3% in January as the cost of imported petroleum shot up 6.4%, its first increase in four months.

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Times wire services were used in compiling this report.