Dive Brief:
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Builders began construction on 6.7% fewer single-family homes in January than in December, dragging overall housing starts down by 2% to start the year, the Census Bureau reported on Wednesday. In December, single-family home construction had reached a seven-year high.
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The news came on the same day that the National Association of Home Builders released its February Housing Market Index, which revealed that homebuilder confidence in the market for new, single-family homes dipped slightly for the third month in a row.
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NAHB Chairman Tom Woods attributed the decline in homebuilder optimism to unusually heavy snow in many parts of the country that kept potential buyers from visiting model homes.
Dive Insight:
Although housing starts and builder confidence have waned, both remain in positive territory.
While the number of ground-breakings slipped after an especially good month, builders started 18.7% more homes in January than they did during the January of 2014. And a score of more than 50 on the Home Market Index indicates that more builders feel positive about the market than negative. February’s score was 55.
“For the past eight months, confidence levels have held in the mid- to upper 50s range, which is consistent with a modest, ongoing recovery,” NAHB Chief Economist David Crowe said. “Solid job growth, affordable home prices and historically low mortgage rates should help unleash growing, pent-up demand and keep the housing market moving forward in the year ahead.”