• January housing starts fell 6% from December and 2.3% from January 2020, to 1.58M (SAAR), according to the U.S. Census Bureau.
• Housing completions in January were down 2.3% from December but up 2.4% from a year ago, to 1.336M (SAAR).
• Permits for future housing projects rose 10.4% from December and 22.5% from last year, to 1.881M (SAAR).

As the new year unfolds, some signals are emerging that many of the constraints that homebuilders powered through in 2020 may finally be eating into their capacity to take on more work in 2021. Housing starts and completions lagged behind expectations last month, perhaps not coincidentally at the same time as lumber prices surged. Lumber now costs more than double what it did this time last year – a fact that that has reportedly caused some builders to stop some projects mid-way. Land and labor shortages also continue to hinder the ability to take on new projects. Still, builders’ earned some benefit of the doubt with the way they handled these hurdles in 2020, and many of the same tailwinds from a year ago remain firmly in place. Home construction was a source of strength in the U.S. economy in 2020, as builders strove to keep up with robust demand for housing and put up homes at the strongest pace in a decade and a half. Optimism among builders rose to new highs in the latter half of last year even as constraints – some pandemic-driven, some not – started to mount, and sentiment remains near its highest level on record. Permits healthily exceeded expectations last month, as clear a sign as any that optimism is translating into actual business plans. Low mortgage rates and a demographic wave continues to buoy demand for housing to begin 2021 and builders appear eager to get to work. But if nothing else, today’s mixed construction figures — even if they prove to be temporary and builders continue to find ways to overcome their obstacles — prove that the industry is not immune to setbacks and hiccups, even as it remains a key driver of economic growth.