The Midwest showed the strongest increase rising 44.5 percent after a weak, weather-marred December. The South saw a 4.9 percent increase. However, the Northeast, hit by harsh weather in recent months, declined 21.3 percent. The West slowed 7.0 percent.
The Federal Reserve jump-started this increase when it slashed interest rates a full percentage point, making homes less expensive and sending 30-year mortgages down to about 7 percent.
January certainly exceeded the expectations of a recent forecast by economists, who predicted 1.573 million starts. Also, in a sign of possible further strength ahead, the request for building permits rose 12.6 percent to a seasonally-adjusted annual rate of 1.697 million units after a 5.7 decrease in December.