Builders broke ground in January on the most U.S. single-family homes in more than four years and permits for future construction rose, an indication the industry’s momentum carried over into 2013.
Work began on 613,000 one-family houses at an annual rate last month, the most since July 2008 and up 0.8% from December’s 608,000, Commerce Department figures showed today in Washington. Total housing starts dropped to a 890,000 rate, less than forecast and restrained by a slump in construction of multifamily units, which is often volatile.
Faster hiring and easier access to credit are needed to help complement historically low mortgage rates and stoke a sustained real-estate rebound. Rising sales at builders such as PulteGroup Inc. and Lennar Corp. indicate housing will keep contributing to growth this year after emerging as a bright spot in the economy in 2012.
“The fact that single-family starts are up is very encouraging, it is more important to the economy in terms of employment and growth” than the multifamily area, said Gus Faucher, a senior economist at PNC Financial Services Group Inc. in Pittsburg, who projected total starts would drop to a 895,000 pace. “The housing market recovery is continuing and will be an important contributor to economic growth. Permits look very solid, and that is a great sign.”
Wholesale prices in the U.S. rose in January for the first time in four months, reflecting higher costs for food and pharmaceuticals, another report showed. The producer-price index climbed 0.2% after a 0.3% drop in December, the Labor Department reported.
Stock-index futures held earlier losses after the reports. The contract on the Standard & Poor’s 500 Index maturing in March fell less than 0.1% to 1,527.1 at 8:34 a.m. in New York.
The median estimate of 85 economists surveyed by Bloomberg projected total housing starts would drop to a 920,000 annual rate. Estimates ranged from 870,000 to 1 million. The prior month’s figure was revised up to 973,000, the most since June 2008, from a previously reported 954,000 pace.
Permits increased to a 925,000 annual rate, the most since June 2008. They were projected to climb to a 920,000 annual rate, according to the survey median. Applications that are higher than the level of starts signal residential construction may strengthen.