According to HUD and the Census Bureau, housing starts took a nationwide dip in January with a decline of 8.5% which is 890,000 units. This was based on a seasonally adjusted annual rate.
Specifically, single-family housing starts were little changed, registering a 0.8% gain to 613,000 units. The pace of these starts have been improving; this was the strongest production pace for single-family housing since July 2008.
However, multi-family housing starts were the biggest contributor to the nationwide decline. These tend to have significant month-to-month volatility. In January, they declined 24.1% to a mere 277,000 units.
Bad news for housing starts doesn't necessarily mean bad news in the rest of the market.
Issuance of permits for new-home construction has increased by 1.8% to 925,000 units which is the quickest pace since mid-2008.
"Steady demand for new homes is prompting builders to put more construction crews back to work in order to replenish thin supplies of completed product," said Rick Judson, chairman of the National Association of Home Builders (NAHB) and a home builder from Charlotte, N.C. "We expect this progress to continue through the spring buying season and beyond, with credit availability and poor appraisals being the primary limiting factors."
Permit issuance can be an indicator of future building activity. Single-family permits rose 1.9% to a seasonally adjusted annual pace of 584,000 units. The multi-family permits increased by 1.5% which is a 341,000 unit pace. Both of these are at their strongest paces since 2008.
"Today's report is quite positive in that it shows continued upward movement in single-family housing production and permitting activity for both single- and multi-family units," noted NAHB Chief Economist David Crowe. "Meanwhile, the decline in multifamily starts reflects an adjustment from an unsustainably large gain in December, and is consistent with the up-and-down swings that are often associated with that sector."
As always, the housing market has its ups and downs, but overall, the economy is recovering. As these reports continue to come out, we receive more and more data that points to overall improvement!
If you are ready to purchase a home, call us at 888-883-5252. We can answer all your questions.
Friday, February 22, 2013
Housing Starts take a dip in January
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