ForConstructionPros.com

MARKET TRENDS

January continues 2005's record year in home building
After a record year for residential construction, the hot market continued with the best January in more than 30 years.

The January pace of new home construction rose to a seasonally adjusted annual rate of 2.276 million units, 14.5 percent above December and 4.0 percent above January 2005. It was the highest monthly rate since 1973.

Housing starts also rose 12.8 percent from December to a new record pace of 1.819 million, up 2.8 percent from a year ago.

Despite the surprising growth, economists are still prediciting a down year for residential construction, saying January's numbers were a result of a temporary sag in interest rates and the warmest January on record.

"Market fundamentals suggest that this pace of activity will be hard to sustain and NAHB's survey of single-family builders points toward some cooling down in coming months, largely because of eroding affordability conditions," said David Seiders, the National Association of Home Builders' chief economist.