Housing starts stalling out
March 7, 2007,
Washington – In one more rough-and-tumble month for the nation’s big housing market, sales skidded down at a double-digit pace in January for the two most forward-looking indicators, housing starts and new home sales.
Providing some relief, sales of existing homes, which account for more than two-thirds of all U.S. housing activity, ticked up for the second month in a row, rising by 3.0% to a seasonally adjusted level of 6.5 million units, the National Association of Realtors reported. But even after two consecutive monthly gains, sales are still off by 8.7% from a level of 7.1 million units recorded for all of 2005 when the housing market was at its zenith.
And David Lereah, chief economist for the home-sellers’ trade group, cautioned against reading too much into the January upturn. “Although we’re expecting existing home sales to gradually rise this year, and buyers are responding to the price correction, some unusually warm weather helped boost sales in January,” he said. “On the flip side, the winter storms that disrupted so much of the country in February could negatively impact the housing market.”
Going forward, the outlook remains weak, with housing starts tumbling by 14.3% and sales of new homes, a highly volatile sector subject to wide monthly swings, plunged by 16.6%, the biggest one-month drop in years.
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