Construction of new, privately-owned residences fell 14.3 percent last month, according to a report issued this morning by the U.S. Census Bureau and the Department of Housing and Urban Development (HUD). The report also showed that housing starts were 37.8 percent below the January 2006 level.

"While the number of housing starts fell last month, recent data still provides great insight into the continued stabilization of the housing market," said Bob Walters, chief economist for Quicken Loans. "While it is premature to say the weak real estate market that dominated 2006 is behind us, it is fair to say that 2007 will be a year of stabilization. Because of this, we expect unsold home inventories to fall throughout the year, eventually allowing builders to quicken their pace of new home construction."