Housing permits rise to highest since 2007

U.S. new home construction remained robust in January and applications to build jumped to the highest level since 2007 as low mortgage rates and a solid labor market continued to fuel housing demand.

Residential starts slipped 3.6 percent, to a 1.57 million annualized rate, still the second-fastest pace of the expansion, after an upwardly revised 1.63 million pace in the previous month, according to government figures released Wednesday.

January starts exceeded the median estimate in a Bloomberg survey of economists. Permits, a proxy for future construction, advanced 9.2 percent, to a 1.55 million rate - the highest since March 2007.

While the pace of construction eased in January, the figures suggest the housing market remains a bright spot for the U.S. economy amid sluggish business investment.

When paired with continued strength in housing permits, current and planned construction should help mitigate a lean supply of housing.

Mild weather likely played a role in both the December and January readings as warmer temperatures supported construction in months that typically slow homebuilding in areas such as the Northeast.

Single-family starts declined 5.9 percent, to a 1.01 million pace, though permits climbed to a 987,000 rate that was also the highest since 2007.

Starts of multifamily homes, a category that tends to be volatile and includes apartment buildings and condominiums, edged up 0.7 percent, to the highest level since 1986.

Permits surged 14.6 percent, to a 564,000 pace.