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US Groundbreaking, Building Permits Plunge in January

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US Groundbreaking, Building Permits Plunge in January

US housing starts and building authorizations plunged in January, as severe weather accentuated already-existing weakness in the housing market.

Groundbreaking in January declined 16 percent to a seasonally adjusted annual rate of 880,000, official data from the Commerce Department showed today. The decline follows a revised 1.05 million-unit pace in December. Meanwhile, building permits tumbled 5.4 percent to a seasonally adjusted annual rate of 937,000, following a revised December rate of 991,000. Economists surveyed by Reuters expected much narrower declines for both indicators.

Groundbreaking for privately-owned, single family houses declined 15.9 percent from the previous month. This represents a seasonally adjusted pace of 573,000. The rate for buildings with five or more units was 300,000.

Housing completions in January were 4.6 percent higher than the revised December rate. Privately-owned housing completions were at a seasonally adjusted annual rate of 814,000.

Privately-owned, single family building permits declined 1.3 percent from the previous month. This represents a seasonally adjusted rate of 602,000. Authorizations for building projects with five or more units was 309,000, official data showed.

Severe weather was probably to blame for the weakest level of housing starts since September. However, the third consecutive month of declining building authorizations points to underlying weakness in the housing sector. Homebuilder confidence declined at the fastest rate ever recorded this month, led by a sharp fall in current sales conditions, sales expectations and homebuyer traffic.

Severe temperatures across the Midwestern and eastern United States have been blamed for the broad slowdown in economic activity over the past two months. Hiring, manufacturing output and retail sales all declined in January.

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