Housing starts drop 3.8% in January's frozen market

January has shaped up to be a stumbling block for the U.S. housing market, with starts and permits both taking a hit in the face of winter weather.

Starts were down 3.8% to a seasonally adjusted annual rate of 1,099,000, according to the Commerce Department. Compared to January 2015, last month's figures were a 1.8% improvement.

December's starts were also revised down to 1,143,000 from the initial estimate of 1.15 million.

Building permit activity didn't fare so well either, dropping 0.2% below the revised December rate of 1,204,000 to a seasonally adjusted annual rate of 1,202,000. However, this is still 13.5% above January 2015.

Single-family permits dropped 1.6% to 720,000, suggesting an above-average slow-down in that segment of the market.

Meanwhile, single-family housing starts came in at 731,000, down 3.9% from the revised December figure of 761,000.

Regionally, the Midwest was responsible for the majority of the setback, with January's housing starts dropping 12.8% below December's numbers. Declines occurred across the country, however.