With Unsold Homes to Sell, Builders Slow January Starts
Housing starts slipped 14.3% in January to a seasonally adjusted annual rate of 1.408 million units, the Commerce Department reported on Friday, which was 37.8% below the pace of a year earlier as builders continued to focus on working down their inventories of unsold homes.
"Builders are doing what they should be doing in the market today," said NAHB President Brian Catalde. "NAHB's surveys of single-family builders have been showing a steady increase in confidence regarding the demand side of the market since last fall, and with sales for new homes stabilizing, builders are working to control their inventories and position themselves for the upcoming spring buying season."
"Home sales apparently stabilized late last year, but the overhang of unsold housing inventory still is quite heavy," said NAHB Chief Economist David Seiders. "Builders have been cutting back on starts of new units to bring supply and demand back into balance."
"We expect housing starts to bottom out in the first quarter of this year before embarking on a gradual recovery path," Seiders said.
Single-family housing starts decreased 11.2% to a seasonally adjusted annual rate of 1.108 million units in January, 38.9% below their year-earlier rate.
Following a 34.4% surge in December, multifamily housing construction fell 24.1% in January to a seasonally adjusted annual rate of 300,000 units.
Permits slowed 2.8% in January to an annual rate of 1.568 million units, which was down 28.6% from a year earlier. Single-family permits were off by 4.0% at a yearly pace of 1.21 million, down 32.6% from January 2006; and multifamily permits were down 0.4% to a 447,000 annual rate, 15.8% below a year earlier.
January’s housing starts decreased 28.5% in the West, 15.2% in the Midwest and 11.8% in the South. They were up 9.9% in the Northeast, with a boost from unseasonably warm winter weather. All four regions, however, reported a construction pace well below a year earlier.
Want to Know the Long-Term Forecast Through 2015?
Find out in HousingEconomics.com’s Long-Term Forecast.
HousingEconomics.com includes downloadable Excel tables featuring the housing starts forecast, GDP, demographics and more.
To learn more, visit www.housingeconomics.com.
NAHB Kit Gives Builders Back-to-Basics Tips in Changing Market
With the current cooling of the nation’s housing market expected to persist into the middle of the year, NAHB has developed a comprehensive online toolkit geared to providing association members with information that will help them prosper in today’s changing business environment.
To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar.
For assistance, call the NAHB Member Service Center at 800-368-5242.