Feb
17

Housing Starts Up to Start the Year

February 17, 2012

Yesterday, Chicago Real Estate Forum discussed home-builder confidence in the market for newly constructed homes rising for the fifth straight month.

Today, there’s reason for that confidence to continue its upward path.

new home being builtNew figures from the U.S. Commerce Department show that housing starts in January increased 1.5 percent to a seasonally adjusted annual rate of nearly 700,000 units to mark the second-best pace of overall housing production in more than three years, according to the National Association of Home Builders.

“The fact that the three-month moving average for housing starts has now increased for nine consecutive months and is approaching the 700,000 mark for the first time since October of 2008 is indicative of a solid recovery in housing activity stemming from recent firming in employment and consumer confidence measures,” said NAHB Chief Economist David Crowe.

“That said, housing production is still far from what would be considered normal in a healthy market, and many challenges remain for home builders in terms of tight credit conditions, difficult appraisals and the continued flow of foreclosed properties on the market – all of which are certainly slowing the pace of improvement in both housing and the overall economy.”

Unfortunately, while all the regions of the country posted gains in housing starts last month, the Midwest experienced a 40.7 percent decline that partially offset a dramatic increase in December.

The issuance of building permits, which can determine future activity, fell 3.7 percent in the Midwest but rose 0.7 percent overall and is 19 percent higher than the rate seen in January 2011.

“Today’s solid housing starts report indicates that builders are putting more of their crews back to work,” said NAHB chairman Barry Rutenberg, “and adds to the growing field of evidence that the overall housing market is gradually but consistently moving in the right direction.”

Categories: Economy, New Homes

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