• Housing starts dropped month-over-month in January, but the number is not statistically significant: we can’t be sure whether the actual number of starts in January was up, down, or flat.
  • On the other hand, building permits for new homes were up in January, growing by 4.6% month-over-month and 8.2% year-over-year. What’s more, both of these numbers are statistically significant, so we can be sure that homebuilders indeed hit the ground running in 2017.
  • The big uptick in permits should be good news for inventory-constrained homebuyers, as permits eventually become starts, which in turn become new homes for sale. As a result, we shouldn’t be surprised to see a strong increase in starts in mid-2017.

Housing starts in January were at a seasonally adjusted rate of 1,246,000, which is an increase of 10.5% year-over-year but a drop of 2.6% month-over-month. That said, these numbers are not statistically significant. We can’t be sure whether the actual number of starts in January was up, down, or flat.

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However, building permits for new homes were up in January, growing by 4.6% month-over-month and 8.2% year-over-year, and has now climbed back to 93% of the historical average. What’s more, both of these numbers are statistically significant, so we can be sure that homebuilders indeed hit the ground running in 2017. The uptick should also be good news for inventory-constrained homebuyers, as permits eventually become starts, which eventually become new homes for sale. As a result, we shouldn’t be surprised to see a strong increase in starts in mid-2017.