Housing Starts Rise

Housing starts measure the number of residential units on which construction is begun each month. To the surprise of many economists, housing starts rose in January, increasing 0.2 percent to a seasonally adjusted annual rate of 1.85 million, the highest level since May 1986. Housing starts were up 8.9 percent from January a year ago. These data, reported by the Commerce Department, differed greatly from the predictions by economists that housing starts would fall by 3.8 percent in January to a 1.77 million annual rate. These predictions evidently failed to take full account of the positive impact on home building of continued low interest rates.