Nationwide housing starts and issuance of permits for new housing construction declined in February as concerns about a number of factors caused builders to pull back on production of new homes, according to released figures from the U.S. Commerce Dept.
Total housing starts declined 22.5% from January to a seasonally adjusted annual rate of 479,000 units, the second-slowest pace on record. Also, the total permit issuance for new homes fell 8.2% to a record low pace of 517,000 units in February.
"The decline in new construction and permits in February is the culmination of a great deal of nervousness that both builders and consumers are feeling right now," said Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, NV. "In an already-fragile market where credit for building and buying homes remains extremely tight, additional concerns about energy costs, interest rates and other factors are contributing to an atmosphere in which many have adopted a very cautious stance."
NAHB economists expect a slight uptick in the future but the say that uncertainties in the market right now are causing most builders and buyers to remain cautious about new home projects.
"We need to see several months of consistent improvement in economic factors, plus concrete signs that the flow of credit to housing is improving, in order for the industry to return to a steady recovery and facilitate job growth,â acknowledged NAHB Chief Economist David Crowe.
Posted by Michaelle Bradford
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