U.S. home builders started construction on homes at a seasonally-adjusted annual rate of 1.58 million in January, representing a 6% decrease from the previous month’s revised figure, the U.S. Census Bureau reported Thursday. Compared with January 2020, housing starts were down roughly 2%.

The pace of building permits, however, was the highest since 2006. Permitting for new homes occurred at a seasonally-adjusted annual rate of 1.88 million, up 10.4% from December and 22.5% from a year ago.

Economists polled by MarketWatch had expected housing starts to occur at a pace of 1.66 million and building permits to come in at a pace of 1.67 million.

What happened: A slowdown in the construction of single-family homes prompted the decline in housing starts in January. Single-family starts were down 12% nationwide, whereas multifamily starts were up 16%.

Regionally, the Northeast was the only part of the country where housing starts were up on a monthly basis in January, with a 2.3% increase. The Midwest, meanwhile, saw the biggest drop in starts, with a 12% decline, followed by the West (down 11%) and South (down 2.5%).

On the permitting side of the equation, the gain in January was largely driven by an uptick in permits for new multifamily structures. The number of permits issued for buildings with five or more housing units was up 28% in January, versus a 3.8% uptick for single-family permits.

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