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State & National Updates

January Starts, Sales Tell Different Stories

February 28, 2018


January Starts, Sales Tell Different Stories

Total housing starts posted strong gains in January, up almost 10% to a 1.33 million seasonally adjusted annual rate. Single-family construction recorded a nearly 4% rise in January, with the three-month moving average near a post-recession high. The increases in construction activity mirror solid levels for the NAHB/Wells Fargo Housing Market Index, which registered a level of 72 in February — near a two-decade high. The volatile multifamily data was up 24% in January. 


Contracts for sales of newly built single-family homes disappointed in January, declining by almost 8%. However, these numbers were at odds with other reports, including ongoing housing price growth and individual builder reports of sales. But the drop matched pending sales of existing homes, which dropped 4.7 in January. Though the January new home sales data will likely be revised up, current inventory of new, ready-to-occupy homes available for sale remains tight.


The median size of new homes continues to decline as the market broadens to include more entry-level homes. The townhouse market grew 7% in 2017, while at the upper end, custom homes saw a more modest growth rate of 2%. The home building and remodeling sectors should continue to expand overall in 2018, fueled by healthy labor conditions and wage gains. The improving economy and increases in income will largely help to offset the hindrance of higher interest rates on housing demand. 

–NAHB Chief Economist Robert Dietz

Starts Status

Total Housing Starts Near Post-Recession High

A strong showing from the multifamily sector led to January's jump. 

Multifamily Built-for-Rent Share Remains Elevated

Starts of rentals accounted for 95% of the multifamily market. 

Townhouse Construction Expands

After a brief lull, the market share of town homes is rising again. 

Custom Building Increases Slightly in 2017

Market share is now 20%, compared to a cycle high of 31.5% set in 2009.

Small Gains for Single-Family Built-for-Rent Construction

Nearly one-third of starts in 2017 came in the fourth quarter. 

Industry Insights

Double-Digit Drop in OSB Prices

The steep decline brings prices back to January 2017 levels. 

Builder Confidence Stays Strong

Housing demand remains positive, but supply-side hurdles persist. 

Home Prices Rose in December

All 20 of the nation's metro areas reported positive annual growth rates.  

Apartment and Condominium Market Ends 2017 on a Positive Note

The majority of builders report market conditions are improving. 

Economic Indicators

Pending Home Sales Start 2018 Lower

Sales level dropped to the lowest level since 2014 due to rising rates and low inventory. 

Inflation Steady with Growth in January

Average hourly earnings are growing, but not at pre-recession rates. 

New Home Size Continues to Fall

Further declines are expected as the entry-level market expands.

Permits Grow Across Most States Over 2017

Twenty states saw growth above 9.6%, but five states recorded a decline.