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US housing starts slow in January

Construction workers build a home in Boca Raton, Florida November 20, 2012
Construction workers build a home in Boca Raton, Florida, November 20, 2012. Construction of new US homes slowed in January while building permits edged up, according to government data released that pointed to continued recovery in the housing sector.

Construction of new US homes slowed in January while building permits edged up, according to government data released Wednesday that pointed to continued recovery in the housing sector.

Housing starts fell 8.5 percent from December to an annual rate of 890,000, the Commerce Department said.

The slowdown in starts in January, although expected, was worse than the average analyst estimate of 914,000 but starts still were well above the 780,000 average rate in 2012.

The December surge in starts -- upwardly revised to 973,000 -- was largely due to milder-than-normal winter weather, analysts said.

The January decline in housing starts was led by multi-unit construction, while starts rose 0.8 percent in the more significant single-family home sector.

On a 12-month basis, January housing starts were up 23.6 percent.

"The sharp drop in starts in January reversed only some of the larger rise in December, consistent with a continued uptrend," said Jim O'Sullivan, chief US economist at High Frequency Economics.

Building permits, a sign of future construction activity, came in stronger than expected.

Building permits rose 1.8 percent from December to an annual rate of 925,000.

The report pointed to continuing recovery in the housing sector after a price bubble collapsed in 2006.

Sales of new homes in the United States in 2012 were up nearly 20 percent from the prior year.

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