Housing starts were down for the month of January 2013, according to the U.S. Department of Commerce. Single family starts declined while multi-family starts varied drastically by region. In several ways the decline in housing starts is both a positive and a negative. Overall housing starts (all types) decreased 8.5 percent in January to a seasonally adjusted annual rate of 890,000. The number is lower than the projected rate of 914,000 provided by economists in a poll conducted by MarketWatch.
In a more in-depth analysis of the data provided by the government on Housing Starts for January, a few key factors stand out. Single family housing starts increased slightly at 0.8 percent, a rate of 613,000. The good news here is that the slowdown gives homebuilders a chance to catch up to the ever-increasing demand for newer homes. The National Association of REALTORS® (NAR) continues to report median price increases as well as decreased inventory in many markets across the country. Andrew Grantham of CIBC World Markets notes that housing starts are still behind household formation, he expects homebuilding to remain on an upswing into 2014.
Multi-family units experienced mixed results. Starts for two or more unit structures fell 24 percent to 277,000, with starts in the Midwest and Northeast down 50 percent and 35 percent, respectively. South and West regions reported increases of 17 percent and 4 percent, respectively.
Long-term implications bode well, with permits up 1.8 percent to 925,000—the largest increase since June 2008. For more information about First Preston HT, please visit our website at FirstPrestonHT.com. You can also join our community on Facebook and Twitter.
Sources:
2) http://www.realtor.org/news-releases/2013/02/january-pending-home-sales-up-in-all-regions
3) http://www.census.gov/construction/nrc/pdf/newresconst.pdf