Single-Family Starts Hug a Downward Road in February
Single-family housing starts continued on a downward trajectory in February, posting a 6.7% decline to a seasonally adjusted annual rate of 707,000 units, according to figures released on March 18 by the U.S. Commerce Department.
Production in the more volatile multifamily sector rose 14.4% in February to a 358,000-unit pace, limiting the decline in total housing starts. Builders broke ground on new homes at a yearly rate of 1.065 million units last month, 0.6% below the revised January rate.
"Builders continue to scale back production of single-family homes in an effort to contain inventories amidst ongoing problems in the mortgage finance arena and other challenges that are keeping many potential buyers on the fence," said NAHB President Sandy Dunn.
"We're doing what we can to restore balance to the supply-demand equation, but we need the Federal Reserve, Congress and the Administration to take immediate action on several fronts if there's any hope of rebuilding consumer confidence and jump-starting the economy," Dunn cautioned.
"Our latest surveys of single-family builders reveal that many prospective buyers are looking into a home purchase at this time, but that they are unwilling or unable to make their move with conditions in the overall economy and financing arena what they are," said NAHB Chief Economist David Seiders.
"The Federal Reserve's latest moves to shore up financial markets have certainly been welcome developments,” said Seiders, including a decision by the Federal Open Market Committee later in the day to cut interest rates by three-quarters of a percentage point. "Beyond this, Congress and the Administration should follow up on the recently enacted economic stimulus package with additional measures aimed directly at boosting the housing market. If prompt action is taken in the direction of a home buyer tax credit, FHA modernization and GSE oversight reform, a housing recovery could take shape by this year's second half and the benefits of that to the overall economy would be substantial."
Regionally, housing starts were up 5.1% in the West and nearly 4% in the South, unchanged in the Midwest and down 27.7% in the Northeast, which had seen a large boost in January. However, every region was down on a quarterly basis in February.
Permit issuance, which can be an indicator of future building activity, declined 7.8% overall last month to a seasonally adjusted annual rate of 978,000 units, with a 6.2% decline registered in the single-family sector to 639,000 units and a 10.8% decline on the multifamily side to 339,000 units.
Attend the Spring Construction Forecast Conference in April
Plan to attend NAHB's Spring Construction Forecast Conference on Thursday, April 24 at the National Housing Center in Washington, D.C. The conference brings together the nation's premier housing economists and finance experts for an in-depth examination of the economic outlook for the housing industry.
Can't attend? Watch the conference webcast live.
For more information, or to register for the conference or webcast, visit www.nahb.org/cfc.
Want to Know the Housing Forecast for the Top 100 Metros?
Find out in HousingEconomic.com’s 2008 to 2009 Metro Forecast (free preview).
Get the metro forecast with in-depth analysis, overviews and downloadable Excel tables.
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Free NAHB Kit Gives Builders Back-to-Basics Tips to Navigate the Slowdown
What was once expected to be a relatively mild housing slump following three years of record new home construction and sales has given way to a significant downturn.
To help members navigate the uncharted waters of this slowdown, NAHB has compiled a comprehensive “Back to Basics” online toolkit — the best of the basics, the tried and true and the truly new. To access the toolkit, click here.
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.