Housing Starts Dip in January 2022

Housing completions also down, but new building permits up slightly

In January 2022, privately-owned housing starts were down by 4.1% from December on a seasonally adjusted annual basis, the U.S. Census Bureau reported on Feb. 17, 2022. Meanwhile, privately-owned housing completions were down by 5.2% from December, but building permits for privately-owned building units edged up by 0.7%. Compared to January 2021, these figures were, respectively, up by 0.8%, down by 6.2%, and up by 0.8%.

The consensus estimate among economists was that January 2022 housing starts would dip by just 0.5% from December. However, building permits exceeded the estimate by 7.9%. The consensus had expected them to fall by 6.6% from December, rather than rise by 0.7%.

Key Takeaways

  • Housing starts in January 2022 fell from December on a seasonally adjusted annual basis.
  • The drop was much larger than economists had forecast.
  • Housing completions also dropped from December.
  • Building permits were up from December and far exceeded the estimate.

Housing Starts Detail

Privately-owned housing starts in January were at a seasonally adjusted annual rate of 1,638,000. This was 4.1% below the revised December estimate of 1,708,000 but 0.8% above the January 2021 rate of 1,625,000.  

Single‐family housing starts in January were at an annual rate of 1,116,000. This was 5.6% below the revised December figure of 1,182,000.

Housing Completions Detail

Privately‐owned housing completions in January were at a seasonally adjusted annual rate of 1,246,000.  This was 5.2% below the revised December estimate of 1,315,000 and 6.2% below the January 2021 rate of 1,328,000.  

Single‐family housing completions in January were at a rate of 927,000. This was 7.3% below the revised December rate of 1,000,000. The January rate for units in buildings with five units or more was 309,000.

Building Permits Detail

Privately‐owned housing units authorized by building permits in January were at a seasonally adjusted annual rate of 1,899,000.  This was 0.7% above the revised December rate of 1,885,000 and is 0.8% above the January 2021 rate of 1,883,000.  

Single‐family authorizations in January were at a rate of 1,205,000. This was 6.8% above the revised December figure of 1,128,000. Authorizations of units in buildings with five units or more were at a rate of 629,000 in January.

Building Permits Methodology Change

The Census Bureau press release advises: "With the January 2022 data month, the monthly Building Permits Survey design has changed from a representative sample to a cut‐off sample. This change allows complete local and county data on new housing units authorized by permits to be published monthly going forward."

The methodology change FAQ document states: "The methodology of the monthly Building Permits Survey prior to January 2022 is a representative sample survey. About half of the permit-issuing places in the United States are surveyed monthly. The remainder of places are surveyed annually ... The monthly estimates ... are derived from a sample of 8,400 permit-issuing places selected from a universe of 20,000 such places."

The FAQ document continues: "Beginning with the January 2022 data, the Building Permits Survey uses a cut-off sample design ... This results in approximately 8,600 jurisdictions where monthly collection will be attempted and 11,400 jurisdictions where monthly collection would not be attempted. Any jurisdiction where monthly data is not received or where monthly collection is not attempted would continue to be asked to report annually."

Regarding the benefits of the new sample design, the Census Bureau states: "A cut-off sample with all places included and representing themselves gives us complete coverage of the target universe down to the place level. This includes metropolitan and county estimates. The current methodology only allows monthly estimates that are representative down to the state level. In addition to the local coverage increases, we anticipate the new methodology will help reduce revisions between the monthly and annual survey estimates."

Article Sources

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  1. U.S. Census Bureau. "Monthly New Residential Construction, January 2022." Accessed Feb. 17, 2022.

  2. Seeking Alpha. "Housing Starts Fall Short on Consensus, While Building Permits Gain." Accessed Feb. 17, 2022.

  3. U.S. Census Bureau. "Frequently Asked Question (FAQs): Monthly Building Permits Survey Sample Methodology Change." Accessed Feb. 17, 2022. 

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