Housing Starts Hold Steady in FebruaryAssociation of Construction and Development
March 24, 2014 — 1,600 views
Housing starts across the nation stayed the same as February, dipping down to 907,000 housing units, which is a yearly rate adjusted to remove seasonal variations of data (SAAR). This is a dip of 0.2 per cent, as per data released by the Census bureau and the Department of Housing & Urban Development.
Rise in permits issued
According to the data, construction rose by 0.3 per cent in February in the one-family housing category to a SAAR of 583,000 housing units. In the multi-family category, the drop was 2.5 per cent to touch 312,000 housing units. Permits given to one-family housing units dropped to 588,000 units, a 1.8 per cent drop, while permits for multi-family units increased by 27.6 per cent to touch 407,000 units. On regional parameters, the total permits increased by 6.3 per cent in the north-eastern parts, 11.8 per cent in the mid-west region and 9.9 per cent in the southern areas. New permits issued are a sign of future construction activity, and the rate of permits issued in February went up by 7.7 per cent to touch a SAAR of over one million units. This level is the highest since last October, according to the available data.
The SAAR of house starts in January was 880,000, much below 1,048,000 that was a revised estimate in December. Permits had dipped to 937,000 SAR in January, a drop of 5.4 per cent from December.
What the new data means
The increase in building permits has beaten experts’ expectations and is being seen as a welcome relief after the dip in January. Although home start rates have doubled from the time of the recession slump, construction still stays under the average of 1.5 million housing unit starts annually. The slowing down of new home projects in the last few months has been attributed to the winter and snow storms that have hit many regions across the nation. Analysts expect warmer weather to boost the market in the months ahead. Builders are worried about a paucity of skilled workers in the market. They are also worried over increasing cost of construction materials.
Analysts are meanwhile hopeful that with affordable pricing of homes and a general improvement in the economy, the housing sector can only improve from here on. The unchanged rate of starts and increase in permits are signs that the housing market could get off to a good start in the months ahead.