February Finds Single-Family Starts on Stable Ground
The pace of single-family home production remained virtually unchanged in February, with a decline of 0.6% to a seasonally adjusted annual rate of 499,000 units, according to figures released on March 16 by the U.S. Commerce Department.
At the same time, a large decline in the more volatile multifamily sector pushed the month’s total housing starts down 5.9% to a seasonally adjusted annual rate of 575,000 units.
"Today's single-family numbers are fairly encouraging, in that the level of building activity held firm even as large portions of the country experienced abnormal weather conditions," noted NAHB Chairman Bob Jones.
"These latest data indicate that the single-family sector is gradually finding more stable ground, particularly in light of the poor weather conditions that hampered new building activity in two out of four regions last month and the continued difficulties that builders faced in accessing financing for new projects," said NAHB Chief Economist David Crowe.
"With the deadline for purchasers to take advantage of home buyer tax credits fast approaching at the end of April, improvement in single-family building activity was expected and may have continued into early March,” Crowe said. “Moreover, the very thin inventory of new homes now on the market, the pent-up demand from three-plus years of low household formations and good affordability conditions will provide the platform for a 25% gain in new-home construction in 2010 over 2009."
Less encouraging, multifamily housing starts plunged 30.3% to a 76,000-unit pace in February, although the decline followed a double-digit increase during the prior month.
On a regional basis, February’s total starts declined 9.6% in the Northeast and 15.5% in the South, where unusually harsh weather was a factor. Starts for the month were up 14.3% in the Midwest and 7.9% in the West.
Permit issuance, which can be a harbinger of future building activity, declined 1.6% to a seasonally adjusted annual rate of 612,000 units in February. This was comprised of a statistically insignificant 0.2% decline to 503,000 units on the single-family side and a 7.6% drop to 109,000 units in the rate of multifamily permitting.
Regionally, permit issuance was mixed in February, with the Northeast unchanged, the Midwest up 11.7%, and the South and West down 5.8% and 2.1%, respectively.
Web Site One-Stop Shop for Tax Credit Info
Builders and other industry professionals can help spur home sales by referring prospective home buyers to www.federalhousingtaxcredit.com. The NAHB Web site provides detailed information on both the extended $8,000 first-time home buyer tax credit and the new $6,500 repeat buyer tax credit signed into law by President Obama.
Consumers can use the Web site to find information on both tax credits — including frequently asked questions and links to social media sites that provide updated information as it becomes available. It also includes a number of home-buying resources for consumers.
Industry professionals are encouraged to highlight the tax credit Web site when marketing to their potential home buyer market.