Housing Starts in State Jump 54% in January

SAN FRANCISCO — California housing construction starts jumped about 54% in January, according to statistics released Monday by Bank of America.

The bank said in its monthly housing newsletter that the seasonally adjusted annual rate for housing starts in January reached 238,900 units--119,600 single-family and 119,300 multifamily units.

Bank economists Michael Smith-Heimer and Michael Salkin said that multifamily construction starts rose 60% nationwide in January, but starts on single-family units were flat.

Smith-Heimer and Salkin said California’s 53.7% rise in construction starts was caused by the continuing decline in interest rates and January’s unusually dry weather, which helped builders clear their backlog of projects delayed by a wet December.

The economists also said that, while the political debate over tax reform continues, many investors are buying property now to take advantage of current depreciation rules. The economists said there is sufficient belief among investors that future changes in the tax law will not cancel out gains provided by current depreciation allowances.

Despite the surge in construction, sales of existing houses in California dipped about 6% in January. Housing prices remained stable. The median price for a California house stood at $110,987, up less than 1% from the previous month.