Unusually cold and wet weather in the South and West helped cool the national pace of new-home construction for February. Housing starts slipped to the seasonally adjusted annual rate of 1.86 million units, as reported by the Commerce Department. Even so, the starts pace remained well above the 2003 annual total of 1.85 million, which was the highest in 26 years.
Overall, the February construction pace was 4.0 percent below January’s upwardly revised rate of 1.93 million and 13.1 percent above the February 2003 pace.
“Builders continued to adjust their new production to a more sustainable level after the surge of late 2003,” said Bobby Rayburn, president of the National Association of Home Builders (NAHB) and a home and apartment builder from Jackson, Miss. “But builders remain very confident about the market, and we expect to maintain a very healthy pace through the coming months.”
“Weather put a crimp in housing activity in the West and South, but favorable market conditions continue to bode well for the future,” said NAHB Chief Economist David Seiders. “The interest rate structure is even more favorable than earlier in the year, and with house price performance remaining solid and continued increases in household formations, we expect housing to remain strong. Indeed, housing starts for 2004 could equal or surpass the excellent performance of 2003 if interest rates are well-behaved as this year progresses.”
For the month, single-family housing starts were down 4.1 percent to a pace of 1.49 million. This was a 13.5 percent increase over the February 2003 pace.
The pace of multifamily housing starts decreased 3.4 percent from January to a seasonally adjusted rate of 366,000 units. This was 11.6 percent above the pace of a year ago.
Construction of new homes and apartments decreased in the South by 10.6 percent and in the West by 7.5 percent from January’s rate, while the Northeast and Midwest posted increases of 25.3 percent and 7.1 percent, respectively.