Home Starts Bloomed in January; Less-Rosy Days Are Seen Ahead

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Home Starts Bloomed in January;
Less-Rosy Days Are Seen Ahead

By Christopher Conkey
From The Wall Street Journal Online

Home builders broke ground at the fastest pace in more than three decades last month, as unusually warm weather trumped signs of a weakening market.

The Commerce Department said housing starts surged 14.5% last month from December to an annual rate of 2.28 million units. Housing starts were up 4% from a year earlier. Permits for new residential buildings rose 6.8% in January from December levels.

Many economists expected a rebound in housing starts after an 8.9% decline in December, but few said they expected such a strong surge. Mild weather in many parts of the country last month -- also a factor underpinning strong retail sales and employment growth in the period -- was cited widely as the main factor behind the surge. Many analysts predict a slowdown in the housing market in coming months.

-- February 21, 2006

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