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Mother Nature Laying the Smack Down on the U.S. Housing Market

Robert Ottone
Feb 19, 2014

Here in the northeast, we’ve been having quite a hellacious winter. It seems to snow every week, which, of course, impacts just about every single aspect of life. The more obvious impacts on an individual’s life with a major snowfall include being given time off from work or working from home, limiting productivity, home renovations, planning and more. Re/Max recently released information regarding the decline of home sales directly connected to the extreme winter weather that’s occurred in the United States. Delayed closing and outright cancellations have led to a 7.1 percent decrease in home sales when compared to 2013 numbers. Median home price actually rose to around $173,000, which is 11 percent higher than the year before. And as if the CFPB and its new mandates were not enough, with Mother Nature getting in on the act, housing starts are also down around 16 percent, according to the U.S. Department of Housing & Urban Development (HUD) and the U.S. Census Bureau, which places housing starts at around 880,000 for the month of January. Single family permits have also shown a 1.3 percent dip, which isn’t a massive number, however; it is worth noting that Re/Max, HUD and the Census Bureau are connecting the dots to the recent horrific weather. "Cold weather clearly put a chill on new home construction last month and this is also reflected in our latest builder confidence survey," said Kevin Kelly, chairman of the National Association of Home Builders (NAHB). "Further, builders continue to face other obstacles, including rising materials prices and a lack of buildable lots and labor." Not everyone is citing the recent weather issue with such doom-and-gloom. "Though the decline in starts is largely weather related, it is worth noting that on the upside, housing production for the fourth quarter was above one million for the first time since 2008 while single-family permits held relatively steady," said NAHB Chief Economist David Crowe. "The less weather sensitive permits data suggests that our forecast for solid growth in single-family housing production in 2014 remains on track, as pent-up housing demand is unleashed." Whatever Mother Nature has in store for the U.S. remains to be seen. Today alone, the next major winter storm is prepared to lay its blankets of snow and ice on the Midwest as Winter Storm Seneca gets ready to hit. Maybe Al Gore was right in all of his global warming speeches? But I would be hard pressed to find a single person who could have correlated Gore's environmental predictions to those of today's U.S. housing market. 
Published
Feb 19, 2014
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