New Home Sales Down In March

April 23, 2014

Sales of newly built, single-family homes fell 14.5 percent to a seasonally adjusted annual rate of 384,000 units in March, according to data released today by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

"We keep hearing from our members that tight credit conditions are preventing many first time buyers and younger families from being able to buy a home," said Kevin Kelly, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Wilmington, Delaware.  "Congress must outline a clear policy on housing finance so that qualified buyers can get home loans.  Otherwise, this continued uncertainty could threaten the housing recovery and overall economy."

"Overly stringent underwriting standards for mortgages have had a detrimental effect on modest priced markets and have hit first time home buyers particularly hard," said NAHB Chief Economist David Crowe.  "As a result, most of the sales are coming from a smaller pool of buyers who have a more established credit history, are more likely to finance with higher cash downpayments and are purchasing higher priced homes."

Regionally, sales in March fell 21.5 percent in the Midwest, 14.4 percent in the South and 16.7 percent in the West.  The Northeast was the exception to the rule, with a 12.5 percent increase.

The inventory of new homes for sale edged up to 193,000 units in March, which is a six month supply at the current sales pace.

Source: National Association of Home Builders

After A Strong Start, Remodeling Activity Should See Some Easing Later In The Year

April 17, 2014

Solid growth is expected in the home remodeling market this year but momentum should begin to moderate in the fourth quarter, according to the Leading Indicator of Remodeling Activity (LIRA), released today by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University.  Sluggishness in the housing market and specifically in home sales may result in a deceleration of home improvement spending from double-digit annual growth through the third quarter to a year-over-year gain in the high single digits by the end of the year.

"The housing recovery has at least temporarily lost some of its momentum," says Eric S. Belsky, managing director of the Joint Center.  "And as a result, remodeling spending is expected to follow suit and see slower growth beginning later this year."

"Home improvement spending has already recovered a significant share of its losses from the downturn," says Kermit Baker, director of the Remodeling Futures Program at the Joint Center.  "As spending moves into the next phase, we expect to see recent double-digit growth tail off to its longer-term average in the mid-single-digit range."

The Leading Indicator of Remodeling Activity (LIRA) is designed to estimate national homeowner spending on improvements for the current quarter and subsequent three quarters.  The indicator, measured as an annual rate-of-change of its components, provides a short-term outlook of homeowner remodeling activity and is intended to help identify future turning points in the business cycle of the home improvement industry.

Note: An important change was made to the LIRA estimation model this quarter.  With the upheaval in financial markets in recent years, the traditional relationship between interest rates and home improvement spending has significantly deteriorated.  As a result, long-term interest rates have been removed from the LIRA estimation model.

Source:  Joint Center for Housing Studios of Harvard University

Builder Confidence Holds Steady In April

April 15, 2014

Builder confidence in the market for newly built, single-family homes rose one point to 47 in April from a downwardly revised March reading of 46 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released today.

"Builder confidence has been in a holding pattern the past three months," said NAHB Chairman Kevin Kelly, a home builder and developer from Wilmington, Delaware.  "Looking ahead, as the spring home buying season gets into full swing and demand increases, builders are expecting sales prospects to improve in the months ahead."

"Job growth is proceeding at a solid pace, mortgage interest rates remain historically low and home prices are affordable," said NAHB Chief Economist David Crowe.  "While these factors point to a gradual improvement in housing demand, headwinds that are holding up a more robust recovery include ongoing tight credit conditions for home buyers and the fact that builders in many markets are facing a limited availability of lots and labor."

Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as "good," "fair" or "poor."  The survey also asks builders to rate traffic of prospective buyers as "high to very high," "average" or "low to very low."  Scores from each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

The HMI index gauging current sales conditions in April held steady at 51 while the component gauging traffic of prospective buyers was also unchanged at 32.  The component measuring expectations for future sales rose four points to 57.

The HMI three month moving average was down in all four regions.  The West fell nine points to 51 and the Midwest posted a four point decline to 49 while the Northeast and South each dropped two points to 33 and 47, respectively.

Source: National Association of Home Builders

Housing Starts Rise 2.8 Percent In March

April 16, 2014

Led by a 6 percent rise in single-family starts, nationwide housing production rose 2.8 percent above an upwardly revised February rate of 920,000 to a seasonally adjusted annual rate of 946,000 units in March, according to newly released figures from HUD and the U.S. Census Bureau.

"We see improving signs of new-home construction as we move into the spring buying season," said Kevin Kelly, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Wilmington, Delaware.  "The strongest recovery is in the Northeast and Midwest, where builders were hampered by severe winter weather earlier this year."

"Today's report is in line with our forecast of a gradual strenghtening in the housing sector in 2014," said NAHB Chief Economist David Crowe.  "However, several uncertainties including tight credit conditions for home buyers and erratic job growth are making builders cautious about getting ahead of demand."

Single-family housing starts rose 6 percent to a seasonally adjusted annual rate of 635,000 units in March, while multifamily starts fell 6.1 percent to 292,000 units.

Regionally in March, combined single and multi-family housing production rose strongly in the Northeast and Midwest with gains of 30.7 percent and 65.5 percent, respectively, but fell 9.1 percent and 4.5 percent in the South and West, respectively.

Overall permit issuance fell 2.4 percent to 990,000 units in March.  The Northeast and Midwest posted gains of 33.3 percent and 26 percent, respectively, while the West was unchanged and the South posted a 17.1 percent decline.

Source: National Association of Home Builders

Latest NAHB Index Reading Shows Recovery Continues To Spread

April 7, 2014

Of the approximately 350 metro markets nationwide, 59 returned to or exceeded their last normal levels of economic and housing activity, according to the National Association of Home Builders/First American Leading Markets Index (LMI), released today.  This represents a net gain of 11 metros year over year.

The index's nationwide score ticked up to .88 from a March reading of .87.  This means that based on current permit, price and employment data, the nationwide average is running at 88 percent of normal economic and housing activity.  Meanwhile, 28 percent of metro areas saw their score rise this month and 83 percent have shown an improvement over the past year.

"I think the big news here is that regions outside of the energy states continue to gain ground," said NAHB Chief Economist David Crowe.  "It's a promising sign to see areas like Los Angeles and San Jose joining the top ten largest MSAs showing a recovery.  We still expect 2014 to be a strong year for housing and to aid in the overall economic recovery.  The job market continues to mend and with that we will see a steady release of pent up demand of buyers."

Baton Rouge, Louisiana continues to top the list of major metros on the LMI, with a score of 1.42 - or 42 percent better than its last normal market level.  Other major metros at the top of the list include Honolulu, Oklahoma City, Austin and Houston, Texas, as well as San Jose, California and Harrisburg, Pennsylvania - all of whose LMI scores indicate that their market activity now exceeds previous norms.

"Things are getting slowly better overall," said NAHB Chairman Kevin Kelly, a home builder and developer from Wilmington, Delaware.  "And with the housing market now entering the spring buying season, the fact that the nation's economy is headed in the right direction is a very promising sign."

"Stronger employment numbers seemed to be the driving force this month - an important factor to the recovery of our economy," said Kurt Pfotenhauer, vice chairman of First American Title Insurance Company, which co-sponsors the LMI report.

Smaller metros showing recovery continue to be dominated by the middle of the country experiencing an energy boom.  Odessa and Midland, Texas, boast LMI scores of 2.0 or better, with their markets now at double their strength prior to the recession.  Also at the top of the list of smaller metros are Bismarck, North Dakota; Casper, Wyoming; and Grand Forks, North Dakota, respectively.

The LMI shifts the focus from identifying markets that have recently begun to recover, which was the aim of a previous gauge known as the Improving Markets Index, to identifying those areas that are now approaching and exceeding their previous normal levels of economic and housing activity.  More than 350 metro areas are scored by taking their average permit, price and employment levels for the past 12 months and dividing each by their annual average over the last period of normal growth.  For single-family permits and home prices, 2000-2003 is used as the last normal period, and for employment, 2007 is the base comparison.  The three components are then averaged to provide an overall score for each market; a national score is calculated based on national measures of the three metrics.  An index value above one indicates that a market has advanced beyond its previous normal level of economic activity.

Source: National Association of Home Builders

NAHB Reveals Most Popular Features In New Homes

March 27, 2014

During New Homes Month in April, the National Association of Home Builders is sharing with home buyers the most popular features in new single-family homes in 2014.  Builders from across the country were surveyed on what features they were most likely to include in a typical single-family home this year, revealing that convenience, livability and energy efficiency are top priorities.

"Newly constructed homes can suit the specific requirements of today's home buyers," said NAHB Chairman Kevin Kelly, a home builder and developer from Wilmington, Delaware.  "And now is a great time to consider buying a new home, as consumers can take advantage of competitive home prices and low interest rates to find the perfect new home for their families."

Home builders are including features that are practical and functional for the daily lives of today's home buyers.  The features that are most likely to be included in a typical single-family home this year are: a walk-in closet in the master bedroom, low-e windows, a laundry room, and a great room.

Energy efficiency is a key theme with Energy-Star rated appliances, programmable thermostats and Energy-Star rated windows at the top of the list.  These features help make the home more comfortable and can save the home owner significant money over the long term.  On a median per square-foot basis, home owners spent 78 cents per square foot per year on electricity, while owners of new homes spent 65 cents per square foot per year, according to data from the 2009 American Housing Survey.

Builders also list features such as granite countertops, a double sink and a central island as winning elements in new-home kitchens, and a linen closet and a private toilet in the bathroom.  Additional features likely to be incuded throughout the home include first-floor ceilings at least nine feet high, a front porch, outdoor lighting, and a patio.

Source: National Association of Home Builders

New Home Sales Continue To Trend Relatively Flat In February

March 25, 2014

Sales of newly built, single family homes fell 3.3 percent to a seasonally adjusted annual rate of 440,000 units in February, according to newly released figures from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

"There is no doubt that the persistently bad weather took a toll on sales in February," said Kevin Kelly, chairman of the National Association of Home Builders and a home bulder from Wilmington, Delaware.  "However, builders continued to increase their inventory of for-sale homes, indicating they still anticipate a relatively strong spring buying season."

"We still expect 2014 will be a strong year for housing," said NAHB Chief Economist David Crowe.  "The first two-month average of 2014 is exactly in line with where 2013 left off.  If not for the unusual weather, we would easily be ahead of last year's pace.  We also continue to see household formations and pent-up demand sales forward."

Regionally, new home sales activity fell 32.4 percent in the weather-battered Northeast, 1.5 percent in the South and 15.9 percent in the West.  The Midwest posted a gain of 36.7 percent, stemming from an unusually low January figure.

The inventory of new homes rose to 189,000 units in February, a 5.2 month supply at the current sales price.

Source: National Association of Home Builders

Housing Starts Hold Steady In February

March 18, 2014

Nationwide housing starts were virtually unchanged in February, inching down 0.2 percent to a seasonally adjusted annual rate of 907,000 units, according to newly released data from the U.S. Department of Housing and Urban Development and U.S. Census Bureau.

"Continuing the January trend and in line with our recent surveys, builders are in a holding pattern.  Poor weather is keeping many from getting into the field and they continue to face challenges related to a shortage of lots and labor," said Kevin Kelly, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Wilmington, Delaware.

"While housing construction is in a recent lull due to unusual weather conditions, we expect to see an improvement as the winter weather pattern subsides and builders prepare for the spring selling season," said NAHB Chief Economist David Crowe.  "Competitive mortgage rates, affordable home prices and an improving economy all point to a continuing, gradual strengthening of housing activity through the rest of the year.  Moreover, building permits, which are less dependent on weather and are a harbinger of future building activity, rose above 1 million units in February."

Single-family housing construction rose 0.3 percent in February to a seasonally adjusted annual rate of 583,000 units while multifamily starts edged 2.5 percent lower to a 312,000-unit pace.

Regionally, combined housing starts activity was mixed in the month, posting gains of 34.5 percent in the Midwest and 7.3 percent in the South and declines of 37.5 percent in the Northeast and 5.5 percent in the West.

Issuance of new building permits rose 7.7 percent to a seasonally adjusted annual rate of 1.02 million units in February.  Single-family permits edged down 1.8 percent to 588,000 units and multifamily permits rose 27.6 percent to 407,000 units.  Regionally, overall permits rose 6.3 percent in the Northeast, 9.9 percent in the South and 17.9 percent in the West but declined 11.8 percent in the Midwest.

Source: National Association of Home Builders

Builder Confidence Treads Water In March

March 17, 2014

Builder confidence in the market for newly-built, single-family homes rose one point to 47 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today.

"The March HMI mirrors last month's sentiment, as builders continued to be affected by poor weather and difficulties in finding lots and labor," said NAHB Chairman Kevin Kelly, a home builder and developer from Wilmington, Delaware.

"A number of factors are raising builder concerns over meeting demand for the spring buying season," said NAHB Chief Economist David Crowe.  "These include a shortage of buildable lots and skilled workers, rising materials prices and an extremely low inventory of new homes for sale."

Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as "good," fair" or "poor."  The survey also asks builders to rate traffic of prospective buyers as "high to very high," "average" or "low to very low."  Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

The index's components were mixed in March.  The component gauging current sales conditions rose one point to 52 and the component measuring buyer traffic increased two points to 33.  The component gauging sales expectations in the next six months fell one point to 53.

The three-month moving averages for regional HMI scores all fell in March.  The Northeast dropped three points to 35, the Midwest fell three points to 53, the South posted a four-point decline to 49 and the West registered a two-point drop to 61.

Source: National Association of Home Builders

NAHB Study Reveals Key Differences In Home Preferences Based On Race Or Ethnicity

March 10, 2014

Today, the National Association of Home Builders (NAHB) released the results of a new study, What Home Buyers Really Want: Ethnic Preferences.  The latest release from NAHB's publishing arm, BuilderBooks is a further analysis of the 2013 study, What Home Buyers Really Want, which presented preferences of all home buyers combined.  This new study compares and contrasts how housing preferences are affected by the racial or ethnic background of a home buyer, after controlling for factors such as age and income.

"The new data reveals some interesting findings about home buying preferences broken down by race and ethnicity," said NAHB Chairman Kevin Kelly, a home builder and developer from Wilmington, Delaware.  "It contains invaluable information for builders by providing a window into the preferences of potential home buyers, and allowing them to tailor things to better meet the needs of their customers."

The survey data confirmed that there are some significant differences across the various ethnic groupd of buyers such as:

• Minority home buyers are typically younger than White non-Hispanic buyers.  The median African-American buyer is 39, the Hispanic buyer is 37, and the Asian buyer is about 36, while the median White buyer is 43 years old.
• Fifty percent or more of buyers in all racial/ethnic groups are married couples: 80 percent of White buyers, 50 percent of African-Americans, 74 percent of Hispanics, and 79 percent of Asians.  Most also have children living at home.
• Asian home buyers have the highest median household income of all four groups, $72,797, compared with $67,747 for Whites, $50,221 for Hispanics, and $43,774 for African-Americans.  Asians also expect to pay the most for their home: $283,469, compared with $205,775 among Whites, $181,444 among Hispanics, and $176,397 among African-Americans.

 Source: National Association of Home Builders

Leading Markets Index Shows 59 Metros At Or Above Normal Levels In March

March 6, 2014

Markets in 59 out of the approximately 350 metro areas nationwide returned to or exceeded their last normal levels of economic and housing activity, according to the National Association of Home Builders/First American Leading Markets Index (LMI), released today.  This represents a net gain of one from the previous month.

The index's nationwide score held steady at .87.  This means that based on current permits, prices and employment data, the nationwide average is running at 87 percent of normal economic and housing activity.  Meanwhile, 32 percent of metro areas saw their score rise this month and 84 percent have shown an improvement over the past year.

"Despite the cold weather that has constrained economic and housing activity across much of the nation this winter, markets are returning to normal levels," said NAHB Chairman Kevin Kelly, a home builder and developer from Wilmington, Delaware.  "As the job and housing markets continue to mend and the onset of spring releases the pent-up demand for new homes, this will bode well for the remainder of 2014."

"The strong energy sector is at the forefront of the recovery and centered in many small and mid-sized markets in Texas, Louisiana, North Dakota and Wyoming," said NAHB Chief Economist David Crowe.  "In fact, these four states account for eight of the top 10 markets on the LMI and 45 percent of the markets that are at or above normal."

"The number of markets on this month's LMI at or above 90 percent of previous norms has climbed to 130 - a positive trend to watch as the year progresses," said Kurt Pfotenhauer, vice chairman of First American Title Insurance Co., which co-sponsors the LMI report.

Baton Rouge, Louisiana, tops the list of major metros on the LMI, with a score of 1.41 - or 41 percent better than its last normal market level.  Other major metros at the top of the list include Honolulu, Oklahoma City, Austin and Houston, Texas, as well as Harrisburg, Pennsylvania and Pittsburgh - all of whose LMI scores indicate that their market activity now exceeds previous norms.

Looking at smaller metros, both Odessa and Midland, Texas, boast LMI scores of 2.0 or better, meaning that their markets are now at double their strength prior to the recession.  Also at the top of the list of smaller metros are Casper, Wyoming; Bismarck, North Dakota; and Grand Forks, North Dakota, respectively.

The LMI shifts the focus from identifying markets that have recently begun to recover, which was the aim of a previous gauge known as the Improving Markets Index, to identifying those areas that are now approaching and exceeding their previous normal levels of economic and housing activity.  More than 350 metro areas are scored by taking their average permit, price and employment levels for the past 12 months and dividing each by their annual average over the last period of normal growth.  For single-family permits and home prices, 2000-2003 is used as the last normal period, and for employment, 2007 is the base comparison.  The three components are then averaged to provide an overall score for each market; a national score is calculated based on national measures of the three metrics.  An index value above one indicates that a market has advanced beyond its previous normal level of economic activity. 

Why Are New Homes Getting So Big? Look At Who's Buying Them

February 25, 2014

Though the average size of new homes keeps getting bigger, there is more to this home buying trend than meets the eye, according to Census Bureau data presented by the National Association of Home Builders during the International Builders' Show in Las Vegas.

"The average home size has continued to rise for the past four years, from 2,362 square feet in 2009 to 2,679 square feet in 2013," said Rose Quint, NAHB assistant vice president for survey research.

The share of new homes with at least four bedrooms has also been on an upward trend, rising 34 percent in 2009 to 48 percent last year.  Meanwhile, the percent of homes with at least three full bathrooms has gone from 23 percent in 2010 to 35 percent in 2013, and the share of homes with three-plus garages has climbed from 16 percent in 2010 to 22 percent last year.

The upward trend also applies to the percentage of two-story single family homes started, with the share steadily rising from 51 percent in 2009 to 60 percent in 2013.

As homes get bigger, so does the average sales price, rising from $248,000 in 2009 to $318,000 in 2013.  To find out why homes are getting so big, you need to look at who is buying them.

"It requires a high credit score and a nice income to qualify for a mortgage," said Quint, who noted that the spread between the average Experian credit score of all U.S. consumers and the average home borrower's score has risen from 33 points in the early 2000s to 58 points in 2013.

The median income of new home buyers has steadily climbed from $91,768 in 2005 to $107,607 in 2011.

During the same period, the number of new home sales has dramatically declined, from 1.28 million to 306,000.

"There are not as many people who have the income that can qualify for a new home," said Quint.

Source: National Association of Home Builders

New Home Sales Rebound In January

February 26, 2014

Sales of newly built, single family homes rose 9.6 percent to a seasonally adjusted annual rate of 468,000 units in January from an upwardly revised pace of 427,000 units in the previous month, according to data released today by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.  This is the strongest sales pace since July of 2008.

"The fact that the cold weather that hit much of the country didn't stop home buyers from going out and purchasing a piece of the American dream is a great sign," said Kevin Kelly, chairman of the National Association of Home Builders and a home builder from Wilmington, Delaware.  "However, the very low supply of new homes on the market and the continued concern of available buildable lots still have builders cautious about getting ahead of themselves."

"We saw a weaker sales number in December 2013 than was previously trending, and I think much of January's increase is due to sales catching up with pent up demand," said NAHB Chief Economist David Crowe.  "Still, there is little doubt that historically low interest rates, affordable home prices and a healing economy are bringing buyers back into the marketplace."

Regionally, new home sales were generally strong with three of the four regions posting large gains.  The South, the West and the Northeast showed improvement, with respective increases of 10.4 percent, 11.0 percent and 73.7 percent.  New home sales in the Midwest fell by 17.2 percent. 

The inventory of new homes for sale remained steady at 184,000 units in January, which is a 4.7 month supply at the current sales pace.

Source: National Association of Home Builders

Housing Affordability Holds Steady In Fourth Quarter

February 20, 2014

Slightly lower median home prices along with uptick in mortgage rates contributed to housing affordability holding steady in the fourth quarter, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index, released today.

In all, 64.7 percent of new and existing homes sold between the beginning of October and end of December were affordable to families earning the U.S. median income of $64,400.  This is virtually the same as the 64.5 percent of homes sold that were affordable to median-income earners in the third quarter.

Meanwhile, the national median home price dipped from $211,000 in the third quarter to $205,000 in the fourth quarter, while average mortgage interest rates rose from 4.45 percent to 4.54 percent in the same period.

"Housing affordability is stabilizing at a time when pent-up demand and ongoing job growth are helping housing markets across the nation to gradually strengthen," said NAHB Chairman Kevin Kelly, a home builder and developer from Wilmington, Delaware.  "While this bodes well for housing in 2014, builders continue to face challenges, including tight credit for home buyers, inaccurate appraisals, and a shortage of workers and buildable lots."

Youngstown-Warren-Boardman, Ohio-Pennsylvania was the nation's most affordable major housing market, as 89.4 percent of all new and existing homes sold in this year's fourth quarter were affordable to families earning the areas' median incomes of $53,900.  Meanwhile, Kokomo, Indiana claimed the title of most affordable smaller market, with 96.3 percent of homes sold in the fourth quarter being affordable to those earning the median income of $60,100.

Other major U.S. housing markets at the top of the affordability chart in the fourth quarter included Harrisburg-Carlisle, Pennsylvania; Syracuse, New York; Buffalo-Niagara Falls, New York; and Scranton-Wilkes-Barre, Pennsylvania; in desceneing order.

Smaller markets joining Kokomo at the top of the affordability chart included Springfield, Ohio; Monroe, Michigan; Vineland-Milville-Bridgeton, New Jersey; and Cumberland, Maryland-West Virginia.

For a fifth consecutive quarter, San Francisco-San Mateo-Redwood City, California held the lowest spot among major markets on the affordability chart.  There, just 14.1 percent of homes sold in the fourth quarter were affordable to families earning the area's median income of $101,200.

Other major metros at the bottom of the affordability chart included Santa Ana-Anaheim-Irvine, California; Los Angeles-Long Beach-Glendale, California; New York-White Plains-Wayne, New York-New Jersey; and San Jose-Sunnyvale-Santa Clara, California; in descending order.

All of the five least affordable small housing markets were in California.  At the very bottom of the affordability chart was Santa Cruz-Watsonville, where 18.6 percent of all new and existing homes sold were affordable to families earning the area's median income of $73,800.  Other small markets at the lowest end of the affordability scale included Salinas, San Luis Obispo-Paso Robles, Napa, and Santa Rosa-Petaluma, respectively.

Go to nahb.org/hoi for tables, historic data and details.

Source: National Association of Home Builders.

Cold Weather Drives Housing Starts Down In January

February 19, 2014

Due largely to unusually severe weather across much of the nation, housing starts fell 16 percent to a seasonally adjusted annual rate of 880,000 units in January, according to newly released figures from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.  Meanwhile, single-family permits, which are often a harbinger of future building activity, posted a modest 1.3 percent decline to a seasonally adjusted annual pace of 602,000 units.

"Cold weather clearly put a chill on new home construction last month and this is also reflected in our latest builder confidence survey," said Kevin Kelly, chairman of the National Association of Home Builders and a home builder and developer from Wilmington, Delaware.  "Further, builders continue to face other obstacles, including rising materials prices and a lack of buildable lots and labor."

"Though the decline in starts is largely weather related, it is worth noting that on the upside, housing production for the fourth quarter was above 1 million for the first time since 2008 while single-family permits held relatively steady," said NAHB Chief Economist David Crowe.  "The less weather sensitive permits data suggests that our forecast for solid growth in single-family housing production in 2014 remains on track, as pent-up housing demand is unleashed."

In January, single-family housing starts posted a 15.9 percent decline to 573,000 units while multifamily production fell 16.3 percent to 307,000 units.

Regionally, single-family housing starts activity rose 10.7 percent in the West and 2 percent in the Northeast and fell 13.8 percent in the South and 60.3 percent in the Midwest.

Overall permit activity fell 5.4 percent to 937,000 units in January.  The decline was due primarily to a pullback in buildings with five units or more, where permits fell 13 percent to 309,000 units.

Regionally, overall permit issuance was down 10.3 percent in the Northeast and 26 percent in the West, but rose 8.6 percent in the Midwest and 3.4 percent in the South.

Source: National Association of Home Builders

New Home Sales Down 7 Percent In December; Up 16.4 Percent For The Year

January 27, 2014

Sales of newly built, single-family homes fell 7 percent to a seasonally adjusted annual rate of 414,000 units in December, according to newly released figures from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.  Despite the monthly drop, home sales in 2013 were up 16.4 percent over the previous year.

"December's decline in new-home sales follows elevated levels in the previous two months and means the fourth quarter was still much stronger than the third," said Rick Judson, chairman of the National Association of Home Builders and a home builder from Charlotte, N.C.  "While we expect sales to gain strength in 2014, builders still face considerable constraints, including tight credit conditions for home buyers, and a limited supply of labor and buildable lots."

"Consumers are getting used to more realistic mortgage rates, which still remain favorable on a historical basis, said NAHB Chief Economist David Crowe.  "As household formations and pent-up demand continue to emerge, we anticipate that 2014 will be a strong year for housing."

Regionally, new-home sales activity fell 36.4 percent in the weather-battered Northeast, 7.3 percent in the South and 8.8 percent in the West.  The Midwest posted a gain of 17.6 percent.

The inventory of new homes fell to 171,000 units in February, which is a five-month supply at the current sales pace.  Although this is an increase over the previous month, it is due to the slower pace in December.

Source: National Association of Home Builders