Housing Starts Down Because of Snow — and the Economy

Housing starts nationwide stumbled in February according to the U.S. Department of Commerce on Tuesday. Some observers cited the weather for the decline, but the relentless drumbeats of unemployment, tight credit and foreclosures were probably also factors.

March 17, 2010
By Dees Stribling, Contributing Editor

Courtesy Flickr Creative Commons user chrisdlugosz

Housing starts nationwide stumbled in February according to the U.S. Department of Commerce on Tuesday. Some observers cited the weather for the decline, but the relentless drumbeats of unemployment, tight credit and foreclosures were probably also factors.

Then again, in the Midwest, where February was merely cold but not snowpocalyptic, starts were up 10.6 percent compared with an equally cold January. In the West, starts gained 7.9 percent.

All together, U.S. housing starts were at a seasonally adjusted annual rate of 575,000, down 5.9 percent from January. Single-family starts accounted for only part of that, since they were down 0.6 percent. Multifamily starts in February, on the other hand, dropped 30.6 percent from the month before.

Commercial Mortgages Relatively Strong: MBA

The Mortgage Bankers Association has published a “Data Note” (study) of loans held by U.S. banks and thrifts, finding that commercial and multifamily mortgages remain relatively strong, at least when compared with other kinds of loans on bank books. As of the the fourth quarter of 2009, fewer such commercial and multifamily mortgages were delinquent than many other kinds of loans, and fewer had been charged off by lenders.

As of 4Q09, according to the Data Note, mortgages associated with commercial properties had a delinquency rate (30 or more days behind) of 5.06 percent, while multifamily property delinquencies were 5.64 percent. That compares with single-family mortgage delinquencies of 12.49 percent and construction loan delinquencies of 18.56 percent. Credit card loans saw delinquencies of 6.28 percent, while home equity loans recorded delinquencies of only 3.15 percent.

During 2009, a year acknowledged as an all-around lousy one for lenders, banks and thrifts were obliged to charge off 2.4 percent of commercial property loans, compared with 1 percent in 2008. They also charged off 1.1 percent of their multifamily mortgages, compared with 0.4 percent the year before. By contrast, lenders charged off 5.4 percent of their construction loans and 9.1 percent of their credit card loans in 2009, up from 2.6 percent and 5.4 percent in 2008, respectively.

Simon Stills Wants GGP

Simon Property Group apparently hasn’t thrown in the towel when it comes to acquiring General Growth Properties and all those sweet regional malls that GGP owns. According to The Wall Street Journal, quoting anonymous sources, Simon told GGP that it was going to make a new proposal in a few days.

To make that happen, reportedly Simon has been talking to some deep-pocketed entities lately, such as sovereign wealth funds and the might-as-well-be-sovereign Blackstone Group, about providing some cash for a deal. The mall giant is also said to be working on avoiding whatever antitrust problems might arise from the combination of GGP’s 200 or so malls with Simon’s 320 or so.

Wall Street had an up day on Tuesday, with the Dow Jones Industrial Average ending 43.83 points higher, or 0.41 percent. The S&P 500 gained 0.78 percent and the Nasdaq advanced 0.67 percent.