Housing starts and new housing permits declined in February, according to recent U.S. Commerce Department data. Concerns about several factors led to the fall, which amounted to a 22.5% declined from January to February, or a seasonally adjusted rate of 479,000 units. That rate is the second-slowest pace on record, according to the National Association of Home Builders (NAHB). Total new permits fell 8.2% to the lowest pace on record—517,000 units in February.
“The decline in new construction and permits in February is the culmination of a great deal of nervousness that both builders and consumers are feeling right now,” said Bob Nielsen, chairman of NAHB and a home builder from Reno, Nev. “In an already-fragile market where credit for building and buying homes remains extremely tight, additional concerns about energy costs, interest rates and other factors are contributing to an atmosphere in which many have adopted a very cautious stance.” Nielsen also noted that one objective of NAHB’s annual legislative conference taking place this month was for hundreds of home builders to deliver a message to Congress that the flow of credit for housing must quickly be restored.
“While our latest member surveys showed a slight uptick in expectations for the future, there are just too many uncertainties out there for most builders and buyers to comfortably move forward with a new-home project at this time,” acknowledged NAHB Chief Economist David Crowe. “We need to see several months of consistent improvement in economic factors, plus concrete signs that the flow of credit to housing is improving, in order for the industry to return to a steady recovery and facilitate job growth.”
See the report from the Department of Commerce.
Written by Elizabeth Ecker