Housing Starts: Further Declines To Start '23

Bottom Line:  Housing starts fell slightly less more expected in January, and December data was revised lower. Multi-family starts, which had remained surprisingly robust, fell for the second straight month and were heading modestly lower on a trend basis. Single-family starts were lower and still trending steadily lower.  Overall, residential construction activity turned from a tailwind to a sharp headwind for economic growth in the 2nd Half of 2022 and looks likely to remain a modest headwind in the first part of 2023.

Total US Annualized Housing Starts FELL 62k to 1.31M, BELOW the 3-Month average of 1.37M, BELOW the 6-Month average of 1.42M and 357k BELOW the year-ago level.  Single-Family Starts FELL 38k to 841k, BELOW the 3-Month average of 842.33k, BELOW the 6-Month average of 867k and 316k BELOW the year-ago level.  Multi-Family Starts FELL 26k to 457k, BELOW the 3-Month average of 512.67k, BELOW the 6-Month average of 535.17k and 42k BELOW the year-ago level.

Regional breakdown:

Total Building Permits were nearly unchanged, UP 2k to 1.34M, BELOW the 3-Month average of 1.34M, BELOW the 6-Month average of 1.44M and 502k BELOW the year-ago level.  Single-Family Permits FELL 13k to 718k, BELOW the 3-Month average of 743.33k, BELOW the 6-Month average of 806.83k and 479k BELOW the year-ago level.  Multi-Family Permits: Two-Four Unit ROSE 12k to 58k, ABOVE the 3-Month average of 52k, ABOVE the 6-Month average of 50.5k and 1k ABOVE the year-ago level.  Multi-Family Permits: 5+ Unit were nearly unchanged, UP 3k to 563k, ABOVE the 3-Month average of 547k, BELOW the 6-Month average of 583.5k but 24k BELOW the year-ago level.