Housing starts down in June, no need to worry for potential home buyers
Posted on Wednesday, July 17, 2013 at 1:59:03 PM
Many home buyers looking for residential financing might be concerned that new homes are being built at a slower rate than previously, but the housing market shouldn't slow down because of it.
New data released by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development showed that both housing starts and building permits are down, but many people don't attribute the changes to the economy.
Some economists had expected a continued growth close to a 959,000-unit rate when the data was released Wednesday, but then attributed the difference to the weather, according to Reuters.
"It looks like it's weather-related," said Sam Bullard, a senior economist at Wells Fargo Securities. "On the surface it doesn't look good, but we are confident that starts activity is still going to climb higher in the months to come."
Typically, more new homes being built and sold has a positive effect on the market. An increase in home prices can make people more confident, and that can improve the selling market and increase real estate activity among those using residential financing, according to USA Today.
No reason to fret for home buyers, though.
"New home supply and housing completions remain low, home prices are rising and, despite the recent rise, mortgage rates remain low," said John Ryding, chief economist at RDQ Economics. "To us, this all points to housing activity adding to growth in the second half of the year."