A surge in multifamily production pushed overall housing starts up 9.7 percent in January to a seasonally adjusted annual rate of 1.33 million units after an upwardly revised December reading, according to newly released data from the U.S. Department of Housing and Urban Development and the Commerce Department.

Multifamily starts rose 23.7 percent to a seasonally adjusted annual rate of 449,000 units. Meanwhile, single-family production posted a healthy 3.7 percent gain to 877,000 units.

“The growth in production is in line with our reports of solid builder confidence in the housing market,” said NAHB chair Randy Noel, a custom home builder from LaPlace, La. “A pro-business regulatory climate and increasing housing demand are boosting builders’ optimism, even as they continue to face supply-side hurdles such as rising construction material prices and access to lots and labor.”

“Demand for owner-occupied housing is rising due to favorable demographic tailwinds and a healthy labor market. Increases in after-tax incomes should help prospective buyers save for a downpayment on a home,” said NAHB chief economist Robert Dietz. “As consumers continue to enter the single-family market, we should see builders increase production to meet this demand.”

Regionally in January, combined single- and multifamily housing production increased 45.5 percent in the Northeast, 10.7 percent in the West, and 9.3 percent in the South. Starts fell 10.2 percent in the Midwest.

Overall permit issuance rose 7.4 percent to a seasonally adjusted annual rate of 1.4 million units, which is a post-recession high. Multifamily permits registered a 26.5 percent gain to 530,000 while single-family permits edged down 1.7 percent to 866,000.

Permit issuance rose 92.5 percent in the South and 17.1 percent in the West. Permits declined 2.6 percent in the Midwest and 21.7 percent in the Northeast.

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