February was not a good month for new home sales. The weak economy and brutal weather contributed to the moribund numbers on new housing starts. The numbers are expected to drop from last years terrible February and this years weak January.
Expectation that housing development will improve in March are far fetched looking at how bad the weather has been, the weak housing market, and the lack of movement in the marketplace.
Mounting foreclosures are making it harder to clear inventories, keeping pressure on prices and discouraging new construction. The economy has yet to create the sustained job growth that could invigorate housing demand and is one reason Federal Reserve policy makers will probably keep interest rates near zero after their meeting today.
The report definitely reflects the severe weather effect, said Ellen Zentner, senior U.S. macroeconomist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. Housing has now got enough support that it has stabilized. With or without support, the housing recovery will be slow going.
Starts on dwellings were projected to fall after a previously reported 591,000 in January, according to the median forecast of 71 economists surveyed by Bloomberg. Estimates ranged from 510,000 to 610,000.
The government officials remind me of the parade scene in Animal House where the Kevin Bacon character is trying to do crowd control? “Remain Calm, All is Well!” Washington and the NAHB are trying to put the best spin possible on the housing market yet is keeps slipping further and further into disarray.
The building permit numbers are looking weak which is a sign on future development. If the snow was keeping everyone from building and the builders were confident they could sell their houses this number would be zooming up. Instead it is drifting down from historic lows.
Yet all we hear is “Remain Calm, All is Well!”
Just tell that to the 64,000 construction workers that were laid off in February.
Building permits, a sign of future construction, decreased 1.6 percent to a 612,000 annual rate after a 4.7 percent drop in January. Permits were forecast to decrease to a 601,000 annual pace, according to the survey median.
Construction of single-family houses dropped 0.6 percent to a 499,000 rate in February.
Work on multifamily homes, such as townhouses and apartment buildings, slumped 30 percent to an annual rate of 76,000, the lowest in four months.
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I truly feel that the real estate market will not see a rise or increase until the national economy starts to look up. The spending habits of so many people rely on how the actual economy is doing and the ability for them to invest their money in things that will provide beneficial wealth in the long run.