Economic Snapshot: Small dips in housing starts, builder confidence
Though builder confidence and housing starts are marginally lower than the previous month, all signs still point to healthy growth in the housing market.
Housing starts
Privately owned housing starts were at a seasonally adjusted annual rate of 1,099,000 in January. This is 3.8 percent below the revised December estimate of 1,143,000 but is 1.8 percent above the January 2015 rate of 1,080,000.
Single-family housing starts were at a rate of 731,000 in January, which is 3.9 percent below the revised December figure of 761,000.
Privately owned housing completions were at a seasonally adjusted annual rate of 1,057,000 in January. This is 2.0 percent above the revised December estimate of 1,036,000 and 8.4 percent above the January 2015 rate of 975,000.
Single-family housing completions were at a rate of 693,000 in January, which is 1.4 percent below the revised December rate of 703,000.
Housing market index
Builder confidence fell three points to 58 in February, down from an upwardly revised January reading of 61.
The Housing Market Index component measuring current sales conditions dropped three points to 65 and the component charting buyer traffic fell five points to 39. However, the component measuring sales expectations in the next six months rose one point to 65 in February.
“Builders are reflecting consumers’ concerns about recent negative economic trends,” said NAHB Chief Economist David Crowe. “However, the fundamentals are in place for continued growth of the housing market. Historically low mortgage rates, steady job gains, improved household formations and significant pent up demand all point to a gradual upward trend for housing in the year ahead.”
Looking at the three-month moving averages for regional HMI scores, all four regions registered declines. The Midwest decreased one point to 57 and the West fell three points to 72. The Northeast and South each posted a two-point loss to 47 and 59, respectively.
