NAHB: Single-family starts find post-tax credit bottom

The National Association of Home Builders (NAHB) interpreted June housing starts data as a sign that single-family starts may be finding a bottom after the expiration of home buyer tax credits April 30.

"The government's figures suggest that single-family housing production may be finding a bottom following the tax credits," agreed NAHB VP and eenior economist Bernard Markstein. "Over the next several months, we expect to see some improvement in both housing starts and sales activity as buyers come forward to take advantage of the very attractive home prices, historically low mortgage rates and excellent selection that characterize today's new-home marketplace. However, builders continue to confront significant challenges in obtaining financing for viable new projects, and this problem remains a formidable obstacle to economic growth."

Single-family housing starts were virtually unchanged from the previous month at a seasonally adjusted annual rate of 454,000 units in June, according to newly released figures by the U.S. Commerce Department. Meanwhile, a 21.5% decline on the more volatile multi-family side weighed down the overall housing production number, which fell 5% to a 549,000-unit rate.  

"As our most recent member surveys have indicated, builders remain very cautious in light of the sluggish pace of the economic recovery and the hesitancy they are seeing among potential home buyers," noted Bob Jones, chairman of the National Association of Home Builders (NAHB) and a home builder from Bloomfield Hills, Mich. "However, today's report is actually somewhat encouraging, because it indicates that single-family production is stabilizing following an expected lull that occurred with the end of the home buyer tax credit program."