Housing starts fell sharply in January for the second straight month as cold and stormy weather continued to batter the recovering housing market.
Starts of single-family houses and apartments fell 16% to a seasonally adjusted annual rate of 880,000 last month after declining dramatically in December, the Commerce Department said Wednesday. Extreme winter weather is largely blamed for both poor showings after starts jumped to their highest level in a year in November.
Starts in December were revised up to an annual rate of 1.05 million from 990,000.
Economists had expected Commerce to report that starts fell to a 950,000 annual rate in January, according to their consensus estimate.
Applications — a gauge of future housing activity — fell 5.4% in January. Applications for permits to build single-family homes fell 1.3%.
The report follows this week's release of a closely watched index of home builders' outlook in February which declined at the fastest-ever pace and indicated that more builders view conditions as poor than good.
In a research note, UBS said the falling measure "suggests inclement weather probably depressed starts further in February."
Other factors may also be at work, such as rising mortgage rates that have dampened home sales.
Although 2014 is off to a rocky start amid the severe weather, many economists expect starts to total more than 1.1 million this year after reaching 923,000 in 2013. That was the most since 2007.