New construction permits soared in January 2021
Continuing a strong upward trend seen through the end of 2020, new construction permits soared in the first month of 2021 — even as starts and completions lagged slightly.
Privately owned housing units authorized by building permits rose by 22.5 percent year over year and 10.4 percent month over month in January, according to data released Thursday by the U.S. Census Bureau and U.S. Department of Housing and Urban Development.
Housing starts fell 2.3 percent year over year and 6 percent month over month while housing completions rose 2.4 percent year over year but fell 2.3 percent from December.
While all three categories saw spikes in December, the January numbers are not as strong in large part, according to experts, due to the difficult logistics of continuing to build enough to address an inventory shortage stretching back years at the start of 2021. Construction of new homes is one of the most practical, if slow-moving and expensive, ways to solve the inventory problems.
“The number of January housing starts is like a typical starter home: OK, but not great,” Holden Lewis, Home, and Mortgage Expert at NerdWallet, said in a prepared statement.“There aren’t enough houses to meet demand. Every time a builder starts constructing a home, it’s helping to alleviate the housing shortage, but we need years of robust homebuilding to return to a balanced market between sellers and buyers. Let’s hope that home construction will increase as the pandemic eases and the economy recovers.”