January Finds Housing Starts in Free Fall
In free fall, U.S. housing starts and permits hurtled downward in January, the U.S. Commerce Department reported, to seasonally adjusted annual rates of 466,000 units and 521,000 units, respectively. Both represented new record lows in a downturn that has gone unbroken for seven straight months.
"Builders are continuing to exercise extreme caution in response to market conditions, particularly weak consumer demand and the large inventory of homes for sale that is being fueled by a constant flow of foreclosures," said NAHB Chairman Joe Robson.
"We are certainly optimistic that the newly signed economic stimulus package — and particularly the enhanced first-time home buyer tax credit — will help spark more consumer demand for homes going forward,” Robson said. “However, until that happens, builders have little choice but to put a hold on new construction."
"January's housing report was even weaker than most analysts expected," noted NAHB Chief Economist David Crowe. "Clearly, builders are waiting for consumers to return to the marketplace before putting their crews back to work, which is the prudent, though painful, thing to do at this time.”
Meanwhile, he said, “many qualified buyers are waiting for their employment outlook to become more secure before coming off the sidelines. Rising foreclosures and forced home sales continue to drive down house prices and provide further consumer hesitancy. Hopefully, the Administration's plan to address the foreclosure crisis will help keep many struggling owners from losing their homes.”
Single-family housing starts fell 12.2% in January to a record-low seasonally adjusted annual rate of 347,000 units, while multifamily starts plunged nearly 28% to a rate of 119,000 units — also a record low.
Regionally, starts plummeted nearly 43% in the Northeast and 29.3% in the Midwest. They were down 12.8% in the South and 6.4% in the West.
January permit issuance, which can be an indicator of future building activity, declined 8% to a seasonally adjusted annual rate of 335,000 units on the single-family side and 1.6% to a rate of 186,000 units on the multifamily side.
Regionally, permits were down 3.3% in the Northeast, 2.4% in the Midwest, 6.9% in the South and 1.8% in the West.
Tax Credit Web Site Looks at Opportunity of a Lifetime
Builders and other industry professionals can help spur home sales by referring prospective first-time home buyers to www.federalhousingtaxcredit.com. The NAHB Web site provides detailed information on the $8,000 federal tax credit for first-time home buyers included in the economic stimulus legislation signed into law by President Obama.
Consumers can use the Web site to find information on the tax credit – including a detailed question and answer section. It also includes information about other housing-related and small business measures in the legislation and a number of home-buying resources for consumers.
“The new tax credit provides a great opportunity for first-time home buyers,” said NAHB Chairman Joe Robson. “Combined with today’s near record low interest rates, the large selection of homes on the market and very competitive pricing, the tax credit should provide the extra incentive needed to get prospective buyers who have been sitting on the fence into the market.”
Industry professionals are encouraged to highlight the tax credit Web site when marketing to their potential first-time home buyer market.
Plan to Attend Construction Forecast Conference
Plan to attend or watch the 2009 Spring NAHB Construction Forecast Conference & Webcast on Thursday, April 23 in Washington, D.C. to get the latest facts, insights and analysis of the housing industry.
Panels of nationally recognized experts at the day-long conference will discuss economic trends, government policies, developments in the housing industry and the results from NAHB's recent surveys.
For more information and to register, visit www.nahb.org/cfc.
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