U.S. home construction dips 3.6% in January

Construction of new homes edged back slightly in January after a December surge that had pushed home construction to the highest level in 13 years.

The U.S. Commerce Department reported that builders started construction on 1.57 million homes, a decline of 3.6% from 1.63 million units in December. That had been the highest point since late 2006 at the peak of the housing boom of the last decade.

Economists had expected a slight pullback from the December surge, which was attributed in part to unseasonably warm weather that had allowed builders to start more construction projects.

Applications for building permits jumped 9.2% in January to an annual rate of 1.56 million units.

Construction of single-family homes fell 5.9% to a seasonally adjusted annual rate of 1.01 million homes, while construction in the smaller apartment category edged up 0.7% to 557,000 units.

After being a drag on economic activity for more than a year, home building rebounded last summer, spurred by rising demand in response to interest rate cuts by the Federal Reserve.

By region, home construction was up a sharp 31.9% in the Northeast and a smaller 1.2% in the West. Construction fell 25.9% in the Midwest and was down 5.4% in the South.•

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