Housing starts and the pulling of construction permits continued to decline in February according to a monthly report issued by the U.S. Census Bureau and the Department of Housing and Urban Development.
Building permits for all residential construction were issued at a seasonally adjusted annual rate of 978,000 units, 7.8 percent below the revised January rate of 1,061,000 and 36.5 percent lower than the revised February 2007 estimate of 1,541,000.
Permits for single family houses were issued at an annual rate of 639,000, 6.2 percent less than last month's estimate of 681,000.
The only region of the country where permitting was up month-over-month was
in the west where it increased 11.7 percent from January. All
regions were down a minimum of 26 percent (Northeast) year over year with the
other three regions down between 32 and 44 percent compared to February 2007.
Privately-owned housing starts in February were at a seasonally adjusted annual rate of 1,065,000, down only slightly - 0.6 percent - from the revised January estimate of 1,071,000 but 28.4 percent lower than the February 2007 figure of 1,487,000.
Single family house starts did not keep pace with overall starts. They were down 6.7 percent to a month-over-month rate of 707,000 compared to 758,000 the month before.
The West and the South were in positive territory relative to the previous month with increases of 5.1 percent and 3.9 percent respectively. In fact, the increase in single family house starts in the West was a whopping 30.6 percent.
There were 1,028,000 units under construction at the end of February but a surprising proportion of these were in buildings with five or more units. 580,000 units were single family houses while 420,000 were in multi-family developments.
The National Association of Home Builders (NAHB) also issued its regular monthly report on builder confidence. The NAHB/Wells Fargo Housing Market Index (HMI) held steady at 20, the same level measured by the index in February. The Index, which began in 1985, hit a record low of 18 in last December.
The HMI measures builder perceptions of current single-family home sales and sales expectations for the next six months as "good," "fair" or "poor" and asks builders to rate current buyer traffic on a six point scale from very low to very high. Scores for each component are given individually and used to calculate the seasonally adjusted HMI. For each component of the survey a number over 50 indicates that more builders view sales conditions as good than poor.
The index gauging current sales conditions for newly built single-family homes held firm at 20 while perceptions of prospective buyer traffic stayed at 19; the component measuring sales expectations for the next six months edged downward by a single point to 26.
"Our surveys confirm what I've been hearing personally from builders across the country, which is that interested buyers are out there, but they are either reluctant to go ahead with a home purchase or they are unable to find mortgage financing they can afford," said NAHB President Sandy Dunn.
NAHB Chief Economist David Seiders applauded the "aggressive actions" of the Federal Reserve over the previous weekend but said, "With the deepening problems in today's economy and financial markets, Congress and the Administration should enact additional stimulative measures, and the next round should be directed squarely at the housing sector. A temporary home buyer tax credit, FHA modernization and GSE oversight reform are the three most important things that Congress can accomplish right now to help ensure that housing does not drag the economy into a full-blown recession. Provided that the necessary actions are taken promptly, a housing market recovery most likely would take shape by the second half of this year."