Home construction slowed in January, as most of the country endured severe winter weather.
Housing starts dropped 2 percent to a seasonally adjusted annual rate of 1.065 million units in January, down from 1.09 million in December, the Commerce Department said Wednesday.
{mosads}”These numbers are consistent with our recent surveys and are primarily due to severe weather hitting the Midwest and other parts of the country,” said National Association of Home Builders Chairman Tom Woods, a home builder from Blue Springs, Mo.
A 22.2 percent drop in the Midwest, where cold weather has prevailed, held back any gains last month.
Still, overall home building is 18.7 percent above the January 2014 rate of 897,000.
Single-family housing production fell 6.7 percent to a seasonally adjusted annual rate of 678,000 in January while multifamily starts increased 7.5 percent to 387,000 units.
Regionally, housing production increased 6.5 percent in the South but fell in the Northeast (3.5 percent), Midwest (22.2 percent) and West (3.4 percent).
“After a strong single-family report in December, it is not surprising to see some pull back in January,” said David Crowe, NAHB’s chief economist.
“With continued job creation and a growing economy, single-family production should make gains in the year ahead.”
Meanwhile, building permits, which forecasts future building, were down 0.7 percent in January to a rate of 1.053 million.
Single-family permits decreased 3.1 percent to 654,000 units, while multifamily permits rose 3.6 percent to a rate of 399,000 units.
Regionally, permits were mixed in January.
The Northeast and West registered gains of 29.5 percent and 16.8 percent, respectively, while the Midwest fell 16 percent and South dropped 8.7 percent.
A separate report on Tuesday showed that home builder confidence slipped in February, mostly because of cold and snow.
Despite the drops, builders are upbeat that once the thaw begins construction and the broader housing market will be revived.