The building recovery slowed down somewhat in January, with housing starts coming in at a below-consensus annualized rate of 890,000 homes that month. Expectations had been for building to have begun on 925,000 homes last month. In all, the January total of 890,000 units started was below the upwardly revised December tally of 973,000 houses. Originally, the December total had been 954,000 residences.

However, this mild setback should be kept in perspective, as a year ago, just 720,000 homes had been started at an annual basis, and at the depths of the housing slide, building had totaled just about a half million annualized units. So, we certainly have come a long way back, although we also have a good deal further to go, as starts had surged to more than 2.3 million annual units at the peak of the pre-recession housing bubble.

Also of note, a more-forward looking metric, building permits, rose slightly last month to an annualized rate of 925,000 homes. That total was incrementally better than the 909,000 permits issued in December, and was much higher than the January, 2012 permits level of 684,000 homes. Expectations, meantime, had been for 920,000 permits to have been issued last month. So, we narrowly bettered the consensus in this area. Clearly, housing is leading the overall business recovery on our shores.

As to the permits, which, as noted, are a more forward-looking metric than starts, the 925,000 total in January of this year exceeded any month in 2012. The latest figure also marked the third month in a row that permits had risen above the 900,000 mark, having come in at exactly 900,000 homes in November and at the aforementioned 909,000 in December.

In the meantime, breaking starts down, we note that the 890,000 level, while notably lower than the estimated 973,000 homes that were started the prior month, was still above every other month in 2012. In fact, as recently as last May, just eight months before, the estimated annual total of homes begun was 706,000. Starts have now been above 800,000 every month since September.

As to regions of the country, we saw that building was off by 35.3% in the Northeast, That is the smallest region of the country, and the totals might well have been lowered by the inclement weather that struck that part of the nation last month. Starts also fell, and even more dramatically, in the Midwest, plunging by an even 50%. The Midwest, which also saw its share of snow last month, is the second smallest of the four areas of the country after the Northeast. However, in the South and the West, two regions that are much less affected by winter storms, starts rose by 4.1% and 16.7%, respectively, last month, attesting to the ongoing vigor of the recovery nationwide.

All in all, this was a solid report, and should the weather have been more cooperative, we could well have pushed up to or even gone above the one million mark for starts in January. February, meanwhile, also has seen stormy times, and we could well be getting more snow this weekend, suggesting that this month could also see building held back. By the spring, though, we might conceivably break above the one-million mark and head higher still over the course of the year.         

 At the time of this article's writing, the author did not have positions in any of the companies mentioned.