US housing starts drop 2.6% in January

US housing starts fell 2.6% in January, according to figures released by the Commerce Department.

Housing starts declined to a seasonally-adjusted annual rate of 1.25m from December’s rate, which was revised up to 1.28m from 1.23m. Analysts had expected starts to come in at 1.23m.

On the year, housing starts were up 10.5%.

Meanwhile, single-family housing starts were up 1.9% from December to 823,000.

Permits for new construction, which are a closely-followed gauge of future demand, rose 4.6% on the month to 1.29m, and were up 8.2% over the year.

Pantheon Macroeconomics said: "Most of the month-to-month movement is in the volatile multi-family sector, with starts down 10.2%, while permits rose 19.8%. In the more sedate, and much larger, single-family sector, permits dipped a bit while starts rose, but the underlying trend in both in recent months has been upwards. We are curious to see if this can last, given that homebuilders' sentiment has already given up two thirds of the gain reported immediately after the election, with buyer traffic back down at its October level. For now, though, the core numbers look robust."