EconUpdate by P. Duffy
Housing starts drop 6.0 percent in January, down 2.3 percent year-on-year
What does this mean? Given a huge jump in lumber prices over the past few months, builders postponed starting new homes in January, with starts falling even further for single-family homes.
Privately-owned housing starts in January were at a seasonally adjusted annual rate of 1,580,000. This is 6.0 percent below the revised December estimate of 1,680,000 and is 2.3 percent below the January 2020 rate of 1,617,000. Single-family housing starts in January were at a rate of 1,162,000, down 12.2 percent from December.
Building permits rise 10.4 percent in January, up 22.5 percent year-on-year
What does this mean? Although builders started fewer homes in January due to spiraling costs for lumber, they continued to pull more permits for the future.
Privately-owned housing units authorized by building permits in January were at a seasonally adjusted annual rate of 1,881,000. This is 10.4 percent above the revised December rate of 1,704,000 and is 22.5 percent above the January 2020 rate of 1,536,000. Single-family authorizations in January were at a rate of 1,269,000, up 3.8 percent from December.
Initial unemployment claims rebound 1.5 percent to 861,000
What does this mean? Claims for unemployment benefits remain elevated as vaccination efforts continue to ramp up.
In the week ending February 13, initial unemployment claims were 861,000, an increase of 13,000 from the previous week’s revised level. Continued claims during the week ending February 6 were 4,494,000, a decrease of 64,000 from the previous week’s revised level. The total number of continued weeks claimed for benefits in all programs for the week ending January 30 was 18,340,161, a decrease of 1,325,567 from the previous week.
Nearly half of single-family rental property owners are at risk for default
What does this mean? Many owners’ lack of financial resources, combined with eviction moratoria, could lead to increasing defaults.
A new analysis from RealtyTrac shows that single-family rental property owners in 48 percent of all U.S. counties are at above-average risk for default, almost 90 percent of which are owned by mom-and-pop investors who own fewer than 10 properties.There were three criteria used to determine which counties might be the most at-risk of single-family rental properties going into default: the percentage of properties in the county that were rental units; the unemployment rate in the county; and the degree to which rental properties were leveraged (the loan-to-value ratio).