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Builder Confidence Holding Mostly Steady in February

Builder Confidence Holding Mostly Steady in February
Builder confidence in the market for newly built, single-family homes slipped a single notch to 46 on the NAHB/Wells Fargo Housing Market Index (HMI) for February, released this week. This marks the continuation of a virtual "holding pattern" for the index following solid gains over the past year, and can be attributed in part to ongoing uncertainties about job growth and consumer access to mortgage credit but also to the issues that builders are confronting now that demand for new homes is strengthening, including rising materials prices and limited availability of labor and lots in certain markets. That said, the index remains near its highest level since May of 2006, and home building is expected to continue on a modest upward trajectory this year, according to NAHB Chief Economist David Crowe.

Looking at the individual components of the HMI, even with a one-point dip, the index gauging current sales conditions held above the critical 50 mid-point for a third consecutive month in February. Meanwhile, the component gauging sales expectations in the next six months rose by one point, to 50, and the component gauging traffic of prospective buyers slipped four points, to 32.  Three-month moving averages for each region’s HMI score were mixed in February, with the Northeast up three points to 39 and the West up four points to 55 and the Midwest and South each down two points, to 48 and 47, respectively.

Starts Fell, But Residential Permits Hit Four-Year High in January

A double-digit dip on the typically volatile multifamily side brought nationwide housing starts down 8.5% to a seasonally adjusted annual rate of 890,000 units in January, according to government data released on Feb. 20. Meanwhile, issuance of permits for new-home construction rose 1.8% to 925,000 units – the quickest pace since mid-2008. Drilling down to the specifics, single-family housing starts were virtually unchanged in January from an improved pace in the previous month, registering a 0.8% gain to 613,000 units. This was the strongest pace of single-family housing production since July 2008.

Meanwhile, those volatile multifamily housing starts declined 24.1% to 277,000 units following a big gain in December. Regionally, combined single and multifamily housing production gained 4.1% in the South and 16.7% in the West, but fell 35.3% in the Northeast and 50% in the Midwest in January.

In the same month, nationwide issuance of residential building permits rose 1.9% on the single-family side to a seasonally adjusted, annual pace of 584,000 units and rose 1.5% on the multifamily side to a 341,000-unit pace. Both were the strongest permit numbers seen since mid-2008. Permitting activity rose in three out of four regions in January, with a 10.1% gain registered in the Northeast, a 1.4% gain registered in the Midwest and a 1.1% gain registered in the South. The West posted virtually no change in permitting activity, with a 0.5% decline.

Commenting on the latest numbers, NAHB Chief Economist David Crowe said, “Today’s report is quite positive in that it shows continued upward movement in single-family housing production and permitting activity for both single and multifamily units." Meanwhile, the decline in multifamily starts reflects an adjustment from an unsustainably large gain in December, and is consistent with the up-and-down swings that are often associated with that sector.

Today's photos are those of Archival Designs' Luxury House Plan, Westover.

Choose from more than 400 house plan designs that we offer in a wide range of styles and sizes.  Some of our more popular house designs include European-inspired Georgian and palladian homes, English manor house plans, Tuscan-style Italian villas, French chateaux, and colonial house plans.  Our Tuscan-style villas range from 1800 sf to 14,814 sf.  Our Newport classic house designs range from 1500 sf to 5000 sf. Our starter castles, mansions and estate homes are designed in the grand tradition of some of the most impressive homes in the world.  Please feel free to search our house designs or browse our photo gallery to get a sense of the many styles and types of house designs we offer.  Our plans have been built around the globe, from Canada to Dubai, and one plan could be just for you!

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  • Joanne Loftus
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