Amidst much hope for a recovering economy February marked one of the roughest months for real-estate in a long time. During the month of February housing starts fell 17% to an annualized pace of 987,000 widely missing expectations according to business insider.com. Although housing starts fell by 17% building permits increased 3% to a pace of 1.092 million which exceeded estimates.
Although this is a negative sign for the economy one can not ignore the winter the eastern half of the United States has faced this winter. With Boston and much of New England experiencing record breaking snowfall we could only expect a standstill in production. It is a good sign that although the weather would slow down building starts, building permits did increase by 3%. I would take this information with a grain of salt. I believe once spring commences we will see a large pickup in housing starts throughout the United States as well as a rebound in the real estate market in the coming months.
http://www.businessinsider.com/february-housing-starts-march-17-2015-3
3 comments:
I had no idea housing starts depended on weather. This article led me to google most of the terms, so I know very little of the issue. So what about states in the south, like Florida and Texas? Does weather affect their housing starts differently?
I think this article is a perfect example of how outside externalities, such as weather, can have an impact on the economy.
Knowing that this is an externality, I am curious of how government may be able to help with the situation since housing rate are dropping. The market may not be able to fix the weather, but it seems feasible that something can be done to help.
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