US Housing Starts Decline - Good For Housing!

Real Estate Agent with Keller Williams Realty | Northern Virginia | 703.635.0388 0225 189802

Starts of new homes have dropped well beyond expectations in December.  New home starts have dropped 4.0% in December to a seasonally adjusted rate of 557,000 units per year.  A much sharper decline than the 0.2% drop expected by industry experts.  However, building permits have increased by 10.9%.

So why is this "good" news for housing?  Because this helps to keep inventory levels in check and to help bring a balance between buyers and sellers.  With too much inventory (which only increases with each new home built) the balance is tipped towards the buyers.  With very low mortgage rates, tax credits, and a leveling of the inventory levels, this is helping to stabilize our market.

What Happened to Rates Last Week:


Mortgage backed Securities rose +16BPS last week helping to lower 30 year fixed mortgage rates slightly.  We had a holiday-shortened week and only two days of economic data to trade with.  From a technical perspective, we flirted with a very important resistance level but could not close above it.

What to watch out for this week. The following are the major economic reports that will hit the market this week.  They each have the ability to affect mortgage rates:

Please call on me any time for an industry update.



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Elite Home Sales Team
Elite Home Sales Team OC - Corona del Mar, CA
A Tenacious and Skilled Real Estate Team

Ok but in our area the inventory is small and it is difficult to find what a client wants.  If we do find the property many offers are put on the property.  This usually means prices are flying up in value.  They are not.

Jan 25, 2010 12:55 AM #1
Jim Crawford
Crye-Leike REALTORS® - Atlanta, GA
Jim Crawford Atlanta Best Listing Agents & REALTOR

It will be interesting to see how this turns out by the end of 2010.

Jan 25, 2010 01:12 AM #2
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Lisa Moroniak

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