Housing Demand Solid Despite Snow-Related Sales Decline in January - 2/28/2005 - Mortgage Loan Refinance Debt Equity

Housing Demand Solid Despite Snow-Related Sales Decline in January

“The fact is that weather was a major factor in the decline, with unusually harsh winter conditions contributing to a 40% drop in the Midwest alone,” said NAHB President David Wilson. “Our latest builder surveys indicate that the fundamentals of the nation’s housing market remain very solid.”

“The January decline is from a December number that Commerce revised upward by 11% since its last report,” noted NAHB Chief Economist David Seiders. “On balance, the housing market is still definitely in good shape. Our latest builder surveys, continuing low mortgage rates and solid growth in employment and household income all bode well for builders in the months ahead.”

Last year’s record-breaking home sales now stand at 1.2 million, an all-time record that’s 10.5% ahead of the previous record set in 2003.

Regionally, snowy weather in the Midwest contributed to a dramatic 40.3% decline in home sales there during January. The Northeast also felt the pinch of wet and snowy conditions, posting a 17.1% decline from December. Sales declined 3.3% in the South and increased 5.6% in the West.

Meanwhile, the number of unsold new units on the market in January climbed 3.5% to 438,000 or a 4.7-month supply at the current sales pace. “A good portion of the units reflected in this inventory have been permitted but not yet started,” noted Seiders.

“The bottom line is that supply and demand in the new-home market are well balanced, and we’re only looking for a modest setback of between 3% and 4% for home sales this year as the interest-rate structure gravitates upward. This housing market still has plenty of strength going forward,” he said.