Groundbreaking on new US homes dropped 16 per cent in January compared to December, and dipped 2 per cent lower than their level one year earlier, data released by the US government Friday shows. The decrease had been widely expected, thanks to January’s cold and stormy weather.
New home starts in January were at an annual rate of 880,000 (seasonally adjusted), well below December’s revised estimate of 1,048,000. In January 2013, the annualized rate was 898,000 (seasonally adjusted). The rate of groundbreaking on single-family homes, by far the largest piece of the market, saw a 15.9 per cent dip in January compared to December.
Sales of previously owned homes, meanwhile, fell 5.1 per cent in January from December to a seasonally adjusted annual rate of 4.62 million, the National Association of Realtors said, also Friday. The drop, the fifth in the past six months, pushed sales down to the lowest level in 18 months.
US Home Sales, Housing Starts
The rate of new groundbreakings in the US fell most precipitously in the snow-covered Midwest, where the pace dropped 67.7% (seasonally adjusted annual rate) in January compared to December, said the US Census Bureau. The pace of groundbreakings fell 12.5 per cent in the South, which has also been hit hard by winter weather this year. The West saw groundbreaking slow 17.4 per cent in January. Only the staunch Northeast increased its rate of groundbreakings, with 61.9 per cent (seasonally adjusted annual rate) more starts in January compared to December.
Permits also dipped in January compared to December, by 5.4 per cent to a seasonally adjusted annual rate of 937,000. However, this rate is still 2.4 per cent above the rate in January 2013.
As for sales, Friday’s report showed existing-home sales were down 5.1 per cent from a year earlier.
The median sales price of existing homes in January was US$188,900, up 10.7 per cent from a year earlier. Inventory remains tight by historical standards but is growing. At the January sales pace, it would take 4.9 months to exhaust the supply of homes on the market, up from 4.6 months in December.
As well, home-builder confidence fell sharply this month, the National Association of Home Builders reported this week. Housing starts—a measure of new construction—fell by 16 per cent in January from December, the Commerce Department reported.