Housing starts decline as builder confidence improves

While data from the Commerce Department shows that housing starts edged lower in December, the National Association of Home Builders notes that despite the decline, builder confidence is improving throughout the country.

While data from the Commerce Department shows that housing starts edged lower in December, the National Association of Home Builders notes that despite the decline, builder confidence is improving throughout the country.

According to a recent report from the Commerce Department, the rate of housing starts fell by 4.1 percent in December to an annual rate of 657,000. However, the rate seen in 2011 was 24.6 percent higher than the one recorded in 2010.

Meanwhile, the rate of single-family home starts rose by 4.4 percent during the month to a seasonally adjusted rate of 470,000 units.

Leading into final month of 2011, real estate data shows that the housing start rate experienced a 9.3 percent spike in November, which could have been a major factor behind the overall rate ending 2011 on a positive note when compared to the previous year.

However, the report noted that new home construction started last year off flat as well, when the rate took a dive of 22.5 percent in February - the largest single month decline recorded since March 1984. 

Additionally, the number of building permits granted marginally increased by 0.1 percent to an annual rate of 679,000 in December.

Meanwhile, despite new home builds falling at the end of 2011, the NAHB says that builder confidence has increased in January for the fourth consecutive month.

The NAHB/Wells Fargo Housing Market Index increased four points to 25 on the scale, while posting gains in all four regions of the country.

"Builder confidence has now risen four months in a row, with the latest uptick being universally represented across every index component and region," said NAHB chairman Bob Nielsen. "This good news comes on the heels of several months of gains in single-family housing starts and sales, and is yet another indication of the gradual but steady improvement that is beginning to take hold in an increasing number of housing markets nationwide - and that has been shown by our Improving Markets Index."

According to the index, builder confidence in the Northeast rose by nine points to 23, while gaining one point in the Midwest, bringing the total to 24. In addition, confidence in the South posted a 2 point increase to 27, while the West rose five points to 21.



blog comments powered by Disqus