The Blubber

"America is about to enter an apartment crunch," per BI.

"The supply of new apartments is drying up — and that's going to drive up your rent."

U.S. single-family home construction took a sharp downturn in January, as snowstorms and freezing temperatures disrupted building activity. While a rebound is possible, growth could be constrained by rising costs tied to import tariffs and persistently high mortgage rates.

The Commerce Department’s report on Wednesday reflected similar weather-related slowdowns seen in retail sales and job growth last month, suggesting economic activity weakened at the start of the first quarter. Some of the decline in housing starts also represented a correction after strong gains in November and December, which were driven by rebuilding efforts following Hurricane Helene.

Despite an ongoing shortage of previously owned homes, President Donald Trump’s protectionist trade policies could make it harder for builders to start new projects.

“The outlook for home construction is clouded by tariffs, which are set to drive up building costs in the months ahead, while buyers are struggling with higher borrowing costs,” said Christopher Rupkey, chief economist at FWDBONDS.

Single-family housing starts, which make up the bulk of home construction, fell 8.4% in January to a seasonally adjusted annual rate of 993,000 units, according to the Census Bureau. December’s data was revised upward, showing homebuilding at a rate of 1.084 million units rather than the previously reported 1.050 million.

Severe winter weather hit much of the country in January, causing steep declines in housing starts in the Northeast, Midwest, and the densely populated South. However, construction surged 24.9% in the West, despite ongoing wildfires in California.

Year-over-year, single-family starts dipped 1.8%. While the national housing shortage continues, higher borrowing costs and tariffs on key materials—including lumber and appliances—are squeezing builders. New home construction remains highly dependent on imports, and in his first weeks in office, Trump imposed an additional 10% tariff on goods from China, further raising costs.