January housing starts were below expectations, but this is a volatile series and seasonal factors can easily distort the month-to-month data around this time of the year. Starts remain in a strong uptrend, and that is confirmed by the ongoing rise in building permits. Separately, the Architecture Billings Index for January was very strong. Taken together, it is clear that construction of homes and commercial space is in full recovery mode.
Even with the January decline, starts are up 65% from the end of 2010. Historically, starts are still very weak, but the recovery from the abysmal recession lows has been very impressive. Lots of room left on the upside.
Building permits are less volatile than starts. They are up 65% from Nov. 2010, and they rose a very strong 35% in the year ended January.
The Architecture Billings Index as hit a new post-recession high. The recovery here has taken a long time to get underway but it now looks like it is on solid ground.