US housing starts surge past expectations in January

US housing starts surged past expectations in January, according to figures released by the Commerce Department.

Housing starts rose 18.6% to a seasonally-adjusted rate of 1.23 million from December's revised rate of 1.037m. Analysts were expecting a 9.9% increase.

On the year, however, housing starts were down 7.8% from January 2018's revised rate of 1.33m.

Single-family housing starts fell to 812,000 from December's revised 829,000.

Meanwhile, building permits were up 1.4% in January to a seasonally-adjusted rate of 1.345m, but down 1.5% from January 2018's rate of 1.366m. Analysts were expecting a level of 1.287m.

Single-family housing starts fell 4.6% to 824,000 from October's revised 864,000. Privately-owned housing completions came in at 1,244m, up 27.6% from December's revised rate of 975,000, and 2.1% higher compared to January 2018.

Ian Shepherdson, chief economist at Pantheon Macroeconomics, said: "The rebound in starts reverses the December plunge, which likely was due to a combination of weather effects and homebuilders’ nervousness as the stock market tanked; the numbers hugely overstated the softening in the market.

"New home sales are now picking up, and the mortgage applications data point to further gains ahead, so single-family construction should creep higher. The multi-family numbers are wild, but the trends are flat. Housing isn’t booming, but neither is it rolling over, and it isn’t going to drag down the rest of the economy."