Much of the volatility in new home construction was felt from declines in detached home starts, which edged down by 1%.
TD Economics predicts the rate of housing starts will continue to improve, hitting an annualized rate of 650,000 by the end of the year largely as a result of further job growth and improving credit conditions.
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The annualized rate of housing starts rose 14.6% to 596,000 units in January, while the annual pace of building permits, an indicator of future starts, fell 10.4% to 562,000 units â€“ closely in line with many economistsâ€™ predictions of 559,000 starts.