Why did housing starts drop only in the South?
WASHINGTON – July 21, 2014 – U.S. housing starts fell 9.3 percent last month to a seasonally adjusted annual pace of 893,000, according to the Commerce Department. But the nationwide decline came from only one area – a 30 percent decline in the South. In the other areas of the U.S., housing starts rose.
Because the drop occurred in only one area and was so dramatic, analysts are now discussing whether it's a temporary occurrence for some reason or something else.
In part, the South had unusually wet weather, and many analysts said it's likely a temporary departure from a trend of recovery in the overall housing market.
Other parts of the country registered gains. Construction in the Midwest, for example, rose 28 percent. The Northeast, meanwhile, climbed 14 percent.
In addition to wet weather, some builders said that municipal permitting processes are taking longer this year, possibly because of short staffing in city building departments. Analysts conclude that the slowdown in the South – defined as a vast region stretching from Maryland to Florida to Texas – could result in a pickup in starts later this summer.
The Commerce Department report did contain its share of silver linings. Looking at the entire second quarter, for instance, construction of single-family homes increased 4 percent from a year earlier.
Source: Wall Street Journal (07/18/14) Zibel, Alan; Hudson, Kris
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