WASHINGTON — Construction of new homes and apartments, defying forecasts of a housing slowdown, shot up in January at the fastest pace in more than three decades.
The Commerce Department reported Thursday that building activity was up 14.5 per cent last month when compared to December, pushing construction to a seasonally adjusted annual rate of 2.276 million units.
That was the fastest construction rate since March 1973, but it was expected to be a one-time blip caused by unusually warm weather in January that prompted builders to start work on more homes. Analysts are forecasting that housing construction will slow this year as the nation's five-year housing boom quiets down.
In other economic news, the number of Americans filing claims for unemployment benefits rose to 297,000 last week, up 19,000 from the previous week. The increase was larger than economists had been expecting but it still left claims at a level indicating a strong job market.
The 14.5 per cent rise in construction activity in January followed a 6.9 per cent drop in December. Analysts had been expecting a rebound but the actual rise was far above their forecasts. Still, they are forecasting that construction of new homes and apartments will decline by about 6 per cent in 2006 from last year's 2.07 million units.
For January, construction of single-family homes rose by 12.8 per cent to an annual rate of 1.819 million units, an all-time high. Construction of multifamily units was up 21.9 per cent to an annual rate of 457,000 units.
Permits, considered a good indication of future activity, rose as well in January, climbing 6.8 per cent from the December level to an annual rate of 2.217 million units. Applications for building permits had been down 4.1 per cent in December.
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