National housing starts fell 16 percent in January to a seasonally adjusted annual rate of 880,000, according to the National Association of Home Builders. Single-family permits were also down slightly to a seasonally adjusted annual pace of 602,000.
“Cold weather clearly put a chill on new home construction last month and this is also reflected in our latest builder confidence survey,” said NAHB Chairman Kevin Kelly. “Further, builders continue to face other obstacles, including rising materials prices and a lack of buildable lots and labor.”
“Though the decline in starts is largely weather related, it is worth noting that on the upside housing production for the fourth quarter was above 1 million for the first time since 2008 while single-family permits held relatively steady,” said NAHB Chief Economist David Crowe. “The less weather-sensitive permits data suggests that our forecast for solid growth in single-family housing production in 2014 remains on track, as pent-up housing demand is unleashed.”
Single-family housing starts posted a 15.9% decline last month to 573,000 units, according to the NAHB. Multifamily production was also down, falling 16.3% to 307,000 units.
The weather has also put a damper on builder confidence in the housing market. The NAHB/Wells Fargo Housing Market Index posted a 10-point drop this month to 46. Any number under 50 indicates that more builders view the market as poor than good.
“Clearly, constraints on the supply chain for building materials, developed lots and skilled workers are making builders worry,” Crowe said. “The weather also hurt retail and auto sales and this had a contributing effect on demand for new homes.”
Housing starts were down across much of the nation, due largely to unusually severe winter weather that’s also led builder confidence to suffer.