Monday, February 20, 2012WASHINGTON -- Building on significant upward revisions to numbers for the previous two months, nationwide production of new single-family homes and apartments increased 1.5% to a seasonally adjusted annual rate of nearly 700,000 units in January. Together with the upwardly revised numbers for December 2011, this is the best pace of single-family starts since April of 2010.
“The solid housing starts report indicates that builders are putting more of their crews back to work, and adds to the growing field of evidence that the overall housing market is gradually but consistently moving in the right direction,” said Barry Rutenberg, chairman of the National Association of Home Builders and a home builder from Gainesville, Fla.
Recent builder surveys also have indicated steadily increasing optimism regarding market conditions while the number of improving housing markets nationwide has grown substantially over the past six months, Rutenberg added. January marks the second-best pace of overall housing production since October 2008.
“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 2008 is indicative of a solid recovery in housing activity stemming from recent firming in employment and consumer confidence measures,” agreed David Crowe, NAHB chief economist. “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.”
Meanwhile, single-family building permits, which can be an indicator of future construction activity, held virtually unchanged, with a 0.9% increase in January to 445,000 units -- again, the best pace since April of 2010.
The multifamily segment also continued to display greater strength in January following a 55% increase in starts activity in 2011 that was attributed to rising demand for rental apartments. While multifamily starts rose 8.5% to a seasonally adjusted annual rate of 191,000 units for the month, permits edged up 0.4% to 231,000 units.
The South, which is the nation’s largest regional housing market, posted the biggest gain in housing starts in January with an 18.3% increase, while the West and Northeast also posted significant gains of 11.9% and 7.9%, respectively. The Midwest was the exception to the rule, posting a 40.7% decline that partially offset a dramatic gain in the previous month.
The South also posted the largest gain in permit issuance in January, with a 10.1% increase. Permits also rose by 4.2% in the Northeast, but declined 3.7% in the Midwest and 18.2 % in the West.
Published by The Business Journal, Youngstown, Ohio.