Housing starts rise
Latest figures for housing starts indicate strength and optimism in the sector, according to an analysis of the findings by PwC.
February housing starts came in at an annualized rate of 1,288,000 starts, 3% higher than January 2017, and 4.4% higher than February 2016. “With three consecutive months at just under 1.3 million starts, this is a strong indication of the strength and optimism in the housing sector, particularly following yesterday's home builder sentiment number, which surged to a 12-year high [link opens in new tab],” said PwC’s US engineering & construction advisory leader, Marc Waco. “While builders continue to face headwinds in the form of land costs and labor shortages, they are cheering last month's executive order from President Trump targeted against the "Waters of the US" rule, which impacts the cost and timing of permitting for builders, ultimately impacting the final sales price of a home.”
The National Association of Homebuilders pegs the cost of compliance with government regulations at almost 25% of the final selling price of a home, said Waco, a number that grew by 30% between 2011 and 2016. “While policy decisions such as this may not directly impact housing starts on a month to month basis, we expect them to help builders address housing affordability challenges, particularly for the entry level home buyer.”
He added that single-family starts showed continued strength in February, coming in at 832,000, 3.1% higher than January's revised 807,000, a decrease of 16,000 from the originally reported number. “We think single-family starts will continue to be the driving force in the growth of housing starts throughout 2017. The volatile multi-family number dropped to 334,000 in February, down 6.2% from February 2016. This is not surprising as we continue to see builders focus their efforts on the pent up demand within the single-family sector.”
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This article was published on 17 Mar 2017 (last updated on 17 Mar 2017).