WASHINGTON, Feb. 20 (Xinhua) -- The U.S. housing market's recovery remains intact despite a slide in housing starts in January, according to a report released Wednesday by Wells Fargo.
The U.S. Commerce Department reported Wednesday that housing starts dropped 8.5 percent last month after a 15.7 percent surge in the previous month. But the slide was not all that surprising given the year-end surge that was bolstered by unusually mild weather and a rush to start projects before the end of the year, the report said.
Single-family starts jumped toward the end of last year, and that momentum appears to be carrying over into 2013, the report said.
Single-family starts rose 0.8 percent in January, following a 6.7 percent rise in December. On a quarterly basis, single-family starts averaged a 589,000-unit pace in the fourth quarter, compared to a 545,000-unit pace in the third quarter.
That puts single-family starts up at a 36.4 percent annual rate during the fourth quarter, the report said.
Since the bulk of spending on residential construction takes place one quarter after a start is booked, the recent gains imply that residential construction will add substantially to growth in the first half of the year, it said.
With seasonal factors affecting the headline housing starts numbers in a greater way, a better gauge of the rising contribution that home-building is making may be gleaned from looking at the number of homes under construction, the report said.
This has posted steady month-to-month improvement over the past year. The number of homes under construction rose 1.5 percent in January, following a 2.8 percent rise in December. Both the number of single-family and multifamily homes increased, with single-family rising 0.7 percent and multifamily rising 2.2 percent.
On a year over year basis, the number of homes under construction has risen 25.7 percent, with single-family rising 17.8 percent and multifamily rising 35.1 percent, the report said.
The housing market continues to improve after a five-year stint of poor performance sparked by a housing bubble that crashed in 2007 and 2008 sent the U.S. economy reeling and sparked downturns worldwide.
Home prices have risen in recent months as the housing market continues to climb out of the hole five years after the housing bubble popped and Americans saw their wealth plummet, as many families invested all their equity in their homes.