A nasty winter is largely to blame for a 16% decline in housing starts in January, the National Association of Home Builders said in a recent news release.
Government figures showed that housing starts fell to a seasonally adjusted annual rate of 880,000 units in January, while permits for new single-family homes also declined. They were off by 1.3%, translating to an adjusted annual rate of 602,000 units.
Single-family starts were down by 16% in January to an annual rate of 573,000 homes; multifamily production was off by 16.3% to an annual rate of 307,000 units.
“Cold weather clearly put a chill on new home construction last month and this is also reflected in our latest builder confidence survey,” NAHB chairman Kevin Kelly said in the release. “Further, builders continue to face other obstacles, including rising materials prices and a lack of buildable lots and labor.”
There is a silver lining to recent housing data, said NAHB chief economist David Crowe: “Though the decline in starts is largely weather related, it is worth noting that on the upside housing production for the fourth quarter was above 1 million for the first time since 2008 while single-family permits held relatively steady. The less weather sensitive permits data suggests that our forecast for solid growth in single-family housing production in 2014 remains on track, as pent-up housing demand is unleashed.”
Looking at the numbers regionally, single-family starts were up 10.7% in the West and 2% in the Northeast. They were off 13.8% in the South and down a whopping 60.3% in the Midwest.
Builder confidence also falls
Also this week, NAHB said that builders’ confidence in the single-family home market, as measured by the NAHB/Wells Fargo Housing Market Index, dropped a full 10 points to 46. The Housing Market Index polls builders on current sales, their expectations of sales in the next six months, and how many prospective buyers they’d seen. In all three areas, confidence flagged.
“Clearly, constraints on the supply chain for building materials, developed lots and skilled workers are making builders worry,” Crowe said in a written statement. “The weather also hurt retail and auto sales and this had a contributing effect on demand for new homes.”
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