Housing starts up for second month
WASHINGTON – Jan. 18, 2007 – Home starts are up for December, according to the U.S. Census Bureau and the Department of Housing and Urban Development (HUD), while builders are more optimistic about the future, according to the National Association of Home Builders (NAHB) in yet another sign that the slow housing market may have turned a corner.
Housing starts
Privately-owned housing starts in December were at a seasonally adjusted annual rate of 1,642,000 – 4.5 percent above the revised November estimate of 1,572,000 but 18.0 percent below the December 2005 rate of 2,002,000.
Single-family housing starts in December were at a rate of 1,230,000, or 4.1 percent below the November figure of 1,282,000. The December rate for units in buildings with five units or more was 350,000. An estimated 1,800,700 housing units were started in 2006 – 12.9 percent below the 2005 figure of 2,068,300.
Building permits
Privately-owned housing units authorized by building permits in December were at a seasonally adjusted annual rate of 1,596,000 – 5.5 percent above the revised November rate of 1,513,000 but 24.3 percent below the December 2005 estimate of 2,107,000. Single-family authorizations in December were at a rate of 1,164,000 – 1.2 percent above the November figure of 1,150,000.
Authorizations of units in buildings with five units or more were at a rate of 353,000 in December. An estimated 1,833,500 housing units were authorized by building permits in 2006, 14.9 percent below the 2005 figure of 2,155,300.
Builder Confidence Improves
WASHINGTON – Jan. 18, 2007 – Builder confidence rose two points in January, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released yesterday. The HMI increased from an upwardly revised 33 in December to 35 in January, its highest level since July of 2006.
“Builders are responding to increased buyer interest at the end of 2006 and beginning of 2007,” says NAHB President David Pressly. “This bodes well for the upcoming spring buying season.”
“The same factors evident at the end of 2006 continue to hold true in today’s housing market – improving affordability measures, strengthening consumer assessments of home buying conditions and an upswing in applications for mortgages to buy homes,” says NAHB Chief Economist David Seiders.
Seiders adds that the recent stabilization of homebuyer demand largely reflects reductions in mortgage interest rates since mid-year, lower energy prices following what had been record highs, and solid growth in employment and household income. Reductions in home prices and widespread sales incentives offered by builders have also helped resuscitate buyer demand.
Two out of three component indexes that make up the complete index registered improvement in January. The index gauging current single-family home sales and the index gauging traffic of prospective buyers each gained three points, to 36 and 26 respectively, while the index gauging sales expectations for the next six months remained unchanged at 49.
Meanwhile, three out of four regions surveyed in the HMI posted gains in January. Two-point gains were registered in the Northeast, Midwest and South, to 39, 24 and 41, respectively. The HMI for the West remained unchanged from the previous month at 32.
Derived from a monthly survey that NAHB has been conducting for 20 years, the NAHB/Wells Fargo Housing Market Index (HMI) gauges builder perceptions of current single-family home sales and sales expectations for the next six months as either “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as either “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 sales conditions as good than poor. © 2007 FLORIDA ASSOCIATION OF REALTORS®
