Thursday, February 17, 2011

NEW SINGLE FAMILY PERMITS DROP IN JANUARY

Housing starts were up in January by 14.6% to a seasonally adjusted rate of 596,000 for types of housing units compared to Decembers’ 520,000.  The good news is that the forecasters had only expected it to rise to 550,000.

But there is a dark cloud to this silver lining.  These same forecasters in December had a stronger housing market with predictions of a seasonally adjusted rate of 627,000 for 2011 based on housing permits.  However there was a sharp 10.4% drop in permits from December making the new number 562,000.

Single family housing permits were hit hard, continuing their decline to a rate of 421,000. Housing experts say that a sustained rate of 600,000 for single family housing is needed before any real turnaround in our economy begins.  This is not good news. 

Homebuilders continue to be cautious and more than half of us think we are still in a major recession.  This leads to people not wanting to buy a new house right now.

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