In the month of February, stats for housing starts did not change that much. A slight decline was there, but it was insignificant. This indicates that the home building industry has become somewhat stable even though the weather has been really bad this winter. According to stats, the decrease is just 0.2%
So is there any way that construction can be accelerated? The industry experts are hopeful that a number of factors will contribute to this. These include a rise in temperatures and the low inventory levels. What about the yearly outlook? That actually depends on the hiring rates and income figures in the country. These should be enough to balance out the increase in home prices and mortgage rates.
A senior economist stated that improvement will be observed in the months to come especially when the weather becomes warmer. He went on to add that both home prices and mortgage rates will likely increase at an acceptable pace. He was positive that this was a good sign because it will pave way for economic growth.
What about building permits? Are they favorable or not? The figures show an increase. Last month, permits rose by 7.7% or 1.02 million. Since October of last year, this is the highest value that has been observed. As for single family homes, unfortunately, February was the third month when they showed a consecutive decline and fell to the lowest value in the past 12 months. A survey estimates the median rate to be around 960,000. The stats for single family homes are better, and rose by 0.3% to achieve a rate of 583,000. In the months before, this value was 581,000.
Though permits are being issued, the weather conditions have still not been good and it looks as though it will be April before they become favorable. Ever since 2003, February has been the coldest month and the lowest ever temperatures were recorded but even here in Texas we are seeing cold temperatures in March. This has affected both the builders and the buyers.
A survey claims that builders’ confidence did not rise as expected this month. Who is to blame? Yes, the bad weather. The value achieved is only 47%, where as it should be over 50%.
As for buyers, they have to bear not just the weather, but the rise in mortgage rates as well. The current rate is 4.37% whereas a year ago it was just 3.63%.
Hopefully, if the weather and the job market becomes stable, the housing market will not be drastically affected.