The home construction market slowed down last month, as the U.S. Census Bureau said privately-owned housing starts in December were at a seasonally adjusted annual rate of 557,000, four percent below the revised November estimate of 580,000, but 0.2 percent above the December 2008 rate of 556,000.
Single-family housing starts in December were at a rate of 456,000; 6.9 percent below the revised November figure of 490,000. The December rate for units in buildings with five units or more was 92,000. An estimated 553,800 housing units were started in 2009, 38.8 percent below the 2008 figure of 905,500.
Building permits were also soft in December, at a seasonally adjusted annual rate of 653,000. This is 10.9 percent above the revised November rate of 589,000 and 15.8 percent above the December 2008 estimate of 564,000. Single-family authorizations in December were at a rate of 508,000; this is 8.3 percent above the revised November figure of 469,000. Authorizations of units in buildings with five units or more were at a rate of 127,000 in December. An estimated 571,600 housing units were authorized by building permits in 2009, 36.9 percent below the 2008 figure of 905,400.
According to the Builders/Wells Fargo Housing Market Index (HMI), published by the National Association of Home Builders (NAHB), Washington, D.C., builder confidence in the market for newly built, single-family homes declined one point to 15 in January on continuing concerns about the poor job market and large number of foreclosed homes for sale.
“At this point, home builders have done everything we possibly can to set the stage for a housing recovery — we’ve thinned our inventories, we’ve kept new construction to a minimum, and we’ve fought for and achieved a great new buying incentive with the extension and expansion of the home buyer tax credit,” said NAHB Chairman Joe Robson, a home builder from Tulsa, Okla. “We stand poised and ready to deliver new homes as soon as our customers are ready to take advantage of the tax credit and other historically good buying conditions in terms of interest rates, selection, and prices. Yet builders also realize that factors beyond our control — including consumer concerns about job security and competition from foreclosed homes on the market — are still impeding demand for new homes at this time.”
“Home buying conditions have rarely been as good as they are right now, but consumers are still waiting to see significant positive signs of improvement in employment and confidence, and this is slowing buyers’ return to the market,” agreed NAHB Chief Economist David Crowe. “Meanwhile, competition from foreclosed homes is also severely impacting new-home sales. That said, expected improvement in the job market this spring will help propel the housing recovery as we head into the prime home buying season.”