The government said today, that the pace of new home and apartment construction in January soared to its highest level in more than three decades as unseasonably warm weather allowed builders to break ground on more projects than expected.
According to Associated Press, last month's rate of new construction was the highest since March 1973. The Commerce Department housing starts, a measure of new construction activity, jumped 14.5% in January from the previous month to a seasonally adjusted annual rate of 2.28 million homes and apartments.
Industry analyst warned that "the much stronger than expected results in January were temporary and that most other economic reports point to a continued slowing in the housing market. For example, mortgage rates have been rising from record lows and sales of new and existing properties have begun to moderate nationwide."
Economist Steven Wood in a report for Insight Economics "Unseasonably mild weather in January, coming after unseasonably severe weather in December, generated a huge increase in housing starts," and adds "Moreover, February's weather is likely to generate a big decline in housing activity next month."
In the Northeast, construction starts soared 29.2% while the Midwest posted a 23.7% gain. Housing starts rose 16.9% in the West and 8.7% in the South. Unusually warm and dry and weather conditions in January had the biggest impact in the Northeast and Midwest, where construction normally goes virtually dormant during the winter months.
The Labor Department reported that new jobless claims for the week ended Feb. 11 rose by 19,000 from the previous week to a seasonally adjusted 297,000 claims, going to other economy news which is published today.
By: Dijon Wainwright