Despite optimism in most forecasts, it looks like 2015 is off to a faltering start for the housing industry.
January was a bad month for housing starts, completions and permits, reflecting perhaps the reason for homebuilder confidence to likewise be down for February.
Single-family authorizations in January were at a rate of 654,000; this is 3.1% below the revised December figure of 675,000.
Single-family housing starts in January were at a rate of 678,000; this is 6.7% below the revised December figure of 727,000.
At the very least, new household formation won’t be one of the drags on housing, according to the University of Southern California Lusk Center for Real Estate.
Lusk Center director of research Gary Painter and doctoral candidate Jung Hyun Choi have found that household formation, a key driver of housing demand, has recovered after the job losses that accompanied the recession.
“The freeze in formations is over and people are again moving out and forming households. This means that real estate professionals and policy makers should not keep waiting for pent-up demand” Painter added. “So while a number of factors will continue to influence the housing recovery, household formation is no longer one of them.”
Next week the industry will get reports on existing home sales and new home sales, which could give a better idea of which direction housing is heading.