By Scott Gamm
NEW YORK (MainStreet) Many areas throughout the country have been slammed with debilitating snow and freezing temperatures since the beginning of the year. Aside from flight delays, agitated commuters and strain on city sanitation budgets, the weather put a damper on the housing market.
In January, housing starts fell 16% to a seasonally adjusted annual rate of 880,000, down 2% year-over-year. Mortgage applications have also been on the decline in mid-February, as the Mortgage Bankers Association reports an 8.5% decrease for the week ending February 21, compared to the prior week. This is the lowest level in almost twenty years.
"Purchase applications were little changed on an unadjusted basis last week, but this is the time of a year we would expect a significant pickup in purchase activity, and we are not yet seeing it," said Mike Fratantoni chief economist at the association.
The S&P/Case-Shiller Home Price Index, which measures home prices of 20 metropolitan cities, rose 0.8% in December, though much of the bad weather began in January.
With cold weather, consumers tend to halt their home search, as the conditions make it difficult to travel to prospective homes. To boot, it can be tough to tell how appealing a house is when it's covered in snow.
"The more important question is how much of an impact can you parse out from what was weather and what was a fundamental housing slowdown," says ITG analyst Steve Blitz.
Blitz agrees weather has caused the housing market to soften, but he's optimistic activity will surge in the spring, when the weather improves.