Housing Starts Decline, but…

Echoing the homebuilders’ confidence index released yesterday, the rate of single-family home starts fell to a 17-year low in January.

It was the tenth-straight month of declining single-family home starts, and the annual rate fell to $743,000.00.

New single-family homes building permits fell as well, also hitting a 17-year low.

However, overall housing starts increased slightly in January, thanks to an increase in multi-family units, such as condos and apartments.

While the big homebuilders are not seeing light at the end of the tunnel, there may be some good for investors in this news: the industry has been beset by a complete excess of home inventory, which combined with the financing and foreclosure difficulties, has worked to push home prices down. As the supply of available homes decreases, there is hope that prices will stabilize.

Additionally, an increase in apartment starts shows us that the big investors are projecting more renters in the future, and those investors who enjoy landlording should position themselves to take advantage of these new tenants.