Housing Starts Drop 14.3 Percent in January as Builders Manage Inventories of Unsold Homes

Washington - February 16, 2007) - Total housing starts declined 14.3 percent in January as builders worked down their inventories of unsold homes, according to figures released by the Commerce Department today. The pace of construction for the month slowed to seasonally adjusted annual rate of 1.408 million units. This was 37.8 percent below the January 2006 pace.

"Builders are doing what they should be doing in the market today," said Brian Catalde, president of the National Association of Home Builders (NAHB) and a home builder from Playa del Rey, Calif. "NAHB's surveys of single-family builders have been showing a steady increase in confidence regarding the demand side of the market since last fall, and with sales for new homes stabilizing, builders are working to control their inventories and position themselves for the upcoming spring buying season."

"Home sales apparently stabilized late last year, but the overhang of unsold housing inventory still is quite heavy," said NAHB Chief Economist David Seiders. "Builders have been cutting back on starts of new units to bring supply and demand back into balance."

"We expect housing starts to bottom out in the first quarter of this year before embarking on a gradual recovery path," Seiders said.

Single-family housing starts decreased 11.2 percent to a seasonally adjusted annual rate of 1.108 million units in January. This was 38.9 percent below the pace of single-family starts a year earlier. Multifamily housing construction was down 24.1 percent for the month to a seasonally adjusted annual rate of 300,000 units in January. The decrease followed a 34.4% increase in multifamily construction the month before.

Builders decreased the pace of permit issuance by 2.8 percent in January to 1.568 million units, a level that was 28.6 percent below a year ago. Single-family permit issuance was down 4.0 percent to a pace of 1.121 million units for the month. This was 32.6 percent below a year earlier.

The pace of multifamily permit issuance increased 0.4 percent to 447,000 units for the month. This was 15.8 percent below the January 2006 pace.

Regionally, housing starts decreased in three of four regions across the country in January. Construction of new homes and apartments was down 15.2 percent in the Midwest, 11.8 percent in the South and 28.5 percent in the West. Favorable weather patterns in the Northeast in January helped boost starts there by 8.9 percent. All four regions, however, reported a pace of construction well below a year earlier.

EDITOR'S NOTE - Visit HousingEconomics.com, the online publication from the NAHB Economics Group, for housing in-depth market analysis, forecasts, housing statistics and more. Visit www.housingeconomics.com for details.

ABOUT NAHB - The National Association of Home Builders is a Washington-based trade association representing more than 235,000 members involved in home building, remodeling, multifamily construction, property management, subcontracting, design, housing finance, building product manufacturing and other aspects of residential and light commercial construction. Known as "the voice of the housing industry," NAHB is affiliated with more than 800 state and local home builders associations around the country. NAHB's builder members will construct 80 percent of the more than 1.56 million new housing units projected for 2007, making housing one of the largest engines of economic growth in the country.

Teaser Mortgage Rates Expire. . . . .Foreclosures Go Up

"Regional Spotlight: As Wisconsin Teaser Mortgage Rates Expire,

Some Unable to Pay"

RisMedia.com (03/13/07)

ForeclosuresWI.com President Robert A. Jansen reports that foreclosure filings in Wisconsin increased 27 percent during the first two months of this year, after increasing 34 percent in 2006. The latest trend is mainly due to such common problems as job loss and financial mismanagement. However, Jansen says a new ingredient has entered the mix, stating, "Much of the increase in foreclosures is the result of individuals stretching to buy more expensive houses than they could afford." He pointed to increases in the number of adjustable-rate mortgages (ARMs) that have made it possible for many Wisconsin residents to purchase residences beyond their means. When teaser-rate terms expire, though, borrowers' monthly mortgage payments routinely soar and foreclosure looms for some. To help ease the problem, the Wisconsin REALTORS® Association (WRA) is partnering with the Wisconsin Mortgage Bankers Association to launch a consumer awareness program this spring that will detail to the public the risks associated with some loan terms. New and existing mortgage customers are expected to be the biggest beneficiaries. WRA President Bill Malkasian states, "We have credible lenders and good laws. What we need is better education."

I’m working with a Realtor, how do I set up showings?

Once you’ve chosen a Realtor you’re comfortable with, they should be able to set you up in their system so you’ll receive regular updates on what’s happening in the market. Any new listings, prices changes or homes that have gone back on the market can be e-mailed to you as they become available, if you’ve asked for this service from your Realtor.

What do you do when there are homes you’d like to see? Simply put, you call the Realtor you’ve chosen to work with and let them know you’d like additional information, or that you’d like to see the house. Most sellers prefer 24 hours notice, and while it does take time for your Realtor to coordinate showings and schedules, typically these showings can be arranged for the next day.

Since the showings are truly dependent on what works for the seller, a buyer needs to remember it might not be possible to see all the listings available, at their convenience. Most sellers are very accommodating. . . .but even the most cooperative seller may have certain “inconvenient” time frames to work around.

What if you’re not working with one specific Realtor and you want to see a house? Keep in mind that any REALTOR can show you any home listed within the MLS (Multiple Listing Service) system, despite which company may have it listed. So again, choose someone you’re comfortable with, and call them.