Housing Starts Drop in January as Permit Applications Hit 8-Year High
Builders broke ground on new houses at a slightly slower pace in January, the Commerce Department said this week, but permit applications for future construction hit an eight-year high, a sign of a vigorous housing sector.</br></br>Total starts fell 0.3 percent to a seasonally adjusted annual rate of 1.534 million in January after a steeply revised 1 percent gain to 1.538 million in December, the department said. January was the fifth consecutive month in which starts exceeded the 1.5 million a year.</br></br>"The January housing starts data reveal that the combination of low interest rates and extraordinarily good weather have provided a strong vaccination for the housing sector from the effects of the Asian currency crisis," said economist Elliott Platt of Donaldson, Lufkin and Jenrette Securities Corp. in New York.</br></br>The January strength was concentrated in the single-family home market, where starts climbed 7 percent to an annual rate of 1.196 million -- the highest level since 1.231 million last February. That followed a 4.2 percent decline in December.</br></br>Construction of apartments, by contrast, fell 19.5 percent last month to 338,000 after rising 18 percent in December.