U.S. housing starts rebounded in January, after a disappointing December that analysts are blaming on unusually cold weather.
A good pace of housing starts reflects a healthy economy, but recently economists have been warning about a housing shortage.
Data released Friday morning showed housing starts jumped 9.7% to 1.33 million units in January, making it the strongest month for home construction since October 2016. Building permits, a reading on future projects, rose 7.4% to 1.39 million units.
But, in mid-January Zillow warned that the inventory shortage is at “crisis” levels in America’s hottest housing markets.
Zillow’s December Real Estate Market Report noted that home shoppers in 2018 will have 10% fewer choices compared to last year, whereas home buyers in America’s hottest housing markets will have 40% fewer homes to choose from.
The number of homes for sale nationwide has declined on an annual basis for the past 35 straight months, the report added, but Zillow said it expects an uptick in home building this year.
Zillow noted that San Jose, Las Vegas and Seattle reported the greatest home value appreciation in 2017. Low housing inventories drive up prices. The latest housing report showed that housing starts increased by 10.7% in the West.