- Texas man arrested for powder-letter hoax
- Islamic State opens ‘marriage bureau’ for single jihadists
- Drone almost blocks California firefighting planes
- Tornado rips off roofs, downs trees near Boston
- GOP: Environmental rules keeping agents from accessing border
- John Kerry: Millions displaced by religious fighting in 2013
- Federal appeals court rules against Virginia’s gay marriage ban
- White House says Russia ‘losing’ war in Ukraine
- Hamas turns to North Korea for weapons deal, Iran for money
- Syrian casualties surge as jihadis consolidate
U.S. housing starts dip in January but remain at solid pace
Question of the Day
WASHINGTON (AP) — U.S. homebuilders began work at a slower pace in January, though the level was still the third-highest since 2008. The pace of building was viewed as a sign of further strengthening in residential real estate.
The Commerce Department says builders started construction at a seasonally adjusted annual rate of 890,000 last month, down 8.5 percent from December, when activity had hit an annual rate of 973,000. The December performance was the best since June 2008.
Applications for building permits rose to an annual rate of 925,000 in January, 1.8 percent higher than December, which had been the high-point since mid-2008.
The pace of construction of single-family homes rose 0.8 percent in January, but apartment construction, which is more volatile, dropped 24.1 percent.
The U.S. housing market slowly is regaining its health after stagnating for roughly five years after the housing boom collapsed. Steady job gains and near-record-low mortgage rates have encouraged more people to buy.
A steady rise in prices reflects, in part, fewer homes for sale. The supply of previously occupied homes for sale has reached its lowest level in more than a decade. And the pace of foreclosures, while still rising in some states, has slowed sharply on a national basis. That slowdown means fewer low-priced foreclosed homes are being dumped on the market.
Those trends, and the likelihood of further price gains, have led builders to step up construction. Last year, builders broke ground on the most homes in four years.
For all of 2012, builders started work on 780,000 homes. That was still only about half the annual number consistent with healthy markets, but it represents a 28 percent jump from 2011. And it was the most housing starts since 2008, when construction was still falling after the housing bubble burst more than six years ago.
Sales of new homes jumped nearly 20 percent last year to 367,000, the most since 2009. Still, many economists don't foresee a full housing recovery before 2015 at the earliest.
The National Association of Home Builders said Tuesday that confidence among U.S. homebuilders slipped in February from a 6½-year high in January. Many builders reported less traffic by prospective customers before the critical spring home-buying season begins.
The homebuilders' sentiment index dipped to 46 in February from 47 in January. It was the first monthly decline in the index since last April.
Readings below 50 suggest negative sentiment about the housing market. The last time the index was at 50 or higher was in April 2006, when it was 51. It began trending higher in October 2011, when it was 17.
Many builders are facing higher costs for building materials and are having trouble obtaining financing for construction. Some also are facing a shortage of workers in markets where residential construction has picked up sharply, such as Texas and Arizona.
Though new homes represent only a fraction of the housing market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to statistics from the homebuilders.
TWT Video Picks
By David Keene
Allowing states to innovate could reduce dependency on bureaucracy
- D.C. seeks to stay judge's order allowing gun owners to carry in public
- Hillary Clinton: Forget Obama, George W. Bush made her 'proud to be an American'
- Illegal immigrants demand representation in White House meetings
- Iraqi Christians rally at White House: 'Obama, Obama, where are you?'
- White House defends Kerry failure to broker Middle East cease-fire
- Border surge puts Obama legacy on immigration at stake
- Romney would win popular vote in rematch against Obama: CNN poll
- Tennessee Gov. Haslam slams White House for secret dump of illegals in his state
- White House says Russia 'losing' war in Ukraine
- Report: 40% of weapons sent to Afghanistan are unaccounted for
Obama's biggest White House 'fails'
Celebrities turned politicians
Athletes turned actors
20 gadgets that changed the world
Fighting in Iraq