WASHINGTON - Unusually severe weather is largely to blame for a 16% drop in housing starts to a seasonally adjusted annual rate of 880,000 units in January, as well as a 10-point decline in builder confidence in the market for newly-built, single-family homes in February, according to the National Association of Home Builders (NAHB).
“Cold weather clearly put a chill on new home construction last month and this is also reflected in our latest builder confidence survey,” said Kevin Kelly, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Wilmington, DE. “Further, builders continue to face other obstacles, including rising materials prices and a lack of buildable lots and labor.”
Single-family permits, which can be an indication of future building activity, posted a small 1.3% decline to a seasonally adjusted annual pace of 602,000 units.
Kelly said that weather conditions across most of the country also led to a decline in buyer traffic last month, with builders having additional concerns about meeting ongoing and future demand due to a shortage of lots and labor.
“Clearly, constraints on the supply chain for building materials, developed lots and skilled workers are making builders worry,” said NAHB Chief Economist David Crowe. “The weather also hurt retail and auto sales and this had a contributing effect on demand for new homes.”
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