NAHB analyzes March starts
With the buying season just around the corner, the National Association of Home Builders has studied the March housing starts data and sees improving signals.
Led by a 6% rise in single-family starts, nationwide housing production rose 2.8% above an upwardly revised February rate of 920,000 to a seasonally adjusted annual rate of 946,000 units in March, according to the figures from the U.S. Census Bureau.
“We see improving signs of new-home construction as we move into the spring buying season,” said Kevin Kelly, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Wilmington, Del. “The strongest recovery is in the Northeast and Midwest, where builders were hampered by severe winter weather earlier in the year.”
The March report "is in line with our forecast of a gradual strengthening in the housing sector in 2014,” said NAHB Chief Economist David Crowe. “However, several uncertainties including tight credit conditions for home buyers and erratic job growth are making builders cautious about getting ahead of demand.”
Single-family housing starts rose 6% to a seasonally adjusted annual rate of 635,000 units in March, while multifamily starts fell 6.1% to 292,000 units.
Regionally in March, combined single- and multifamily housing production rose strongly in the Northeast and Midwest with gains of 30.7% and 65.5%, respectively, but fell 9.1% and 4.5% in the South and West, respectively.
Overall permit issuance fell 2.4% to 990,000 units in March. The Northeast and Midwest posted gains of 33.3% and 26%, respectively, while the West was unchanged and the South posted a 17.1% decline.
Home Depot sees e-commerce as path to growth
According to a new Wall Street Journal report, Home Depot is focusing its efforts these days on the expansion of its e-commerce business, which means no new store openings for the time being.
"The retail model forever was to increase sales through opening additional units, but as you added stores to a finite group of households, each store becomes less profitable," Home Depot CEO Frank Blake told the Journal. "So the decision was made to stop opening additional boxes."
What that means for the retailer is the proliferation of online distribution centers, which will stock over 17 times the inventory of an average brick-and-mortar store.
However, as Blake noted in the interview, this presents logistical challenges for its bulky, heavy inventory. The company hopes the e-commerce component will pick up steam among contractors as well as consumers, who may prefer to have heavy appliances shipped to them instead.
Home Depot was opening as many as 200 stores per year prior to the recession.