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November EPI Index Shows No Change
Housing Starts Dip 4% in November
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Continuing an uninterrupted free-fall, U.S. housing starts and permits fell for a seventh consecutive month in January, according to U.S. Commerce Department figures. New-home production fell by 16.8 percent to a seasonally adjusted annual rate of 466,000 units, while permits for new housing construction fell 4.8 percent to a rate of 521,000 units. Both of these numbers were new record lows.
“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 National Association of Home Builders (NAHB) Chairman Joe Robson, a home builder from Tulsa, Okla. “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. However, until that happens, builders have little choice but to put a hold on new construction.”
NAHB Chief Economist David Crowe said the housing report was weaker than most analysts expected. “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,” he said.
Meanwhile, 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. Builders hope the administration's announced plan will address the foreclosure crisis in a meaningful way and help keep many struggling owners from losing their homes.
Single-family housing starts fell 12.2 percent in January to a record-low seasonally adjusted annual rate of 347,000 units, while multi-family starts fell nearly 28 percent to a rate of 119,000 units — also a record low. Regionally, starts plummeted nearly 43 percent in the Northeast and 29.3 percent in the Midwest. They also fell 12.8 percent in the South and 6.4 percent in the West.
January building permits, which can be an indicator of future building activity, declined 8 percent to a seasonally adjusted annual rate of 335,000 units on the single-family side and 1.6 percent to a rate of 186,000 units on the multi-family side. Regionally, permits were down 3.3 percent in the Northeast, 2.4 percent in the Midwest, 6.9 percent in the South and 1.8 percent in the West.
New Privately Owned Housing Units Started
(Thousands of units, seasonally adjusted annual rate)
1-Preliminary; 2-Revised; Note: Detail may not add to total because of rounding.
Source: U.S. Bureau of the Census