FXstreet.com (Barcelona) - Housing Starts increased slightly in the United States in January from December, while Building permits decreased to their lowest level in 16 years, according to the US Census Bureau.

In January, Housing Starts increased 0.8% from December to 1.012 million annual rate from December's revised figure of 1.004m annual rate. January's increase was larger than the 1.010M annual rate expected bythe analysts. Year on year, housing starts fell 27.9%.

Building permits fell 3.0% to 1.048 million annual rate. Ian Shepherdson, Chief U.S. Economist at High Frequency Economics affirms that the analysts expected a larger rebound in both indicators: After the huge declines in both starts and permits in December we had hoped for something of a rebound, albeit temporary, but the underlying downward trends are so strong that starts were little changed and permits dropped for the eighth straight month.

Furthermore, Shepredson warns against euphoria,asJauarys numbers relyon volatile multi-family houses: The details are even worse than the headlines, which were supported by the hugely volatile multi-family numbers. Single-family starts dropped a hefty 5.2%, with permits down 4.1%. There is no sign whatever of any easing in the rate of decline. Eventually, such a huge drop in production will reduce inventory and allow the market to stabilize, but for now it's just pain, pain, pain.