U.S. housing starts fall, but still at lofty levels
WASHINGTON, (Reuters) - U.S. housing starts fell in January as ground breaking for single-family projects slipped
off a 6-1/2-year peak, but stayed at levels consistent with a
gradually improving housing market.
Groundbreaking declined 2.0 percent to a seasonally adjusted annual pace of 1.07 million units, the Commerce Department said on Wednesday. Decembers' starts were barely revised at a 1.09 million-unit pace and January's reading was in line with Wall
Starts have now been above the one million-unit mark for five straight months. Compared to January last year, groundbreaking was up 18.7 percent.
Sluggish wage growth and a shortage of homes on the market stymied housing last year, even as the broader economy was accelerating.
But a turnaround in housing is expected this year as a rapidly tightening labor market pushes up wages and encourages more young adults to move out of their parents' basements and set up their own homes.
Already in the fourth quarter, household formation was accelerating, breaking above the one-million mark that usually is associated with a fairly healthy housing market. Continued...