US Home Construction Slows in First Month of 2013

Home construction in the US has slowed in January.

In the first month of 2013, American homebuilders started work at a slower pace, despite the level still being the third highest since 2008. The building pace was interpreted as an indication of further solidifying in residential real estate.

An economist from 4CAST in New York, Sean Incremona said: "This may be a correction of sorts but nothing to signal any newfound worries in the housing market."

Builders began construction at an 890,000-unit yearly rate in January, which dipped 8.5 percent from the previous month, according to the commerce department. December hit a 973,000 annual rate, which was the best month's performance since June 2008.

US Home Construction Slows

However, a leap in permits for future residential building may offer hope to keep the housing market on track. January's annual rate of 925,000 was a 1.8 percent increase from December, which had been the elevated point since mid-2008.

Construction pace for single-family housing rose a delicate 0.8 percent, while the more volatile apartment construction decrease 24.1 percent.

Five years after the housing boom downfall, the US home market is gradually regaining its footing. Almost record-low mortgage rates and secure job gains have encouraged more to buy.

Prices steadily rising in part reflects fewer house for sale. Formerly occupied homes available to buy have hit its lowest supply level in over ten years. While still increasing in some states, foreclosures pace had dramatically slowed nationally. This means less inexpensive foreclosed houses being put on the market.

These trends, along with the further price gain likelihood, have made builders increase construction. In 2012, builders hit a record high for home building in four years.

For the year, builders began work on 780,000 houses. Compared to healthy markets, this only about half the yearly number. But rivaled with the year previous, it shows a 28 percent lift, and the most home starts since 2008.

Last year also saw new home sales rise almost 20 percent to 367,000, which is the most since 2009. However, many economists don't expect the housing construction sector to fully recovery until at least 2015.