WASHINGTON — The housing market remains a significant risk to the economy, data released Wednesday showed, as bad weather across much of the country hammered the construction industry.
Along with icy storms, the real-estate recovery is facing man-made head winds. On Wednesday, the government said buyers will face higher fees and tougher standards for home loans backed by the Federal Housing Administration, a popular source of loans for first-time buyers.
Unemployment is expected to be high throughout the year, which will drive the foreclosure rate to records.
“If we don’t get some jobs, it’s not going to make a difference,” said Rick Jenkins, owner of R.J. Builders in Terre Haute, Ind.
Construction of new homes and apartments fell 4 percent in December to a seasonally adjusted annual rate of 557,000, from an upwardly revised 580,000 in November, the Commerce Department said.
Applications for future projects, however, increased strongly as the industry ramps up for the spring selling season.
The results for new- home construction were lower than the 580,000 forecast by economists surveyed by Thomson Reuters and were led by declines of 19 percent in the Northeast and Midwest.
Construction fell 1 percent in the West but rose more than 3 percent in the South.
Like homeowners, builders also are having trouble getting loans. David Crowe, chief economist at the National Association of Home Builders, said financing for new projects has dried up steadily over 18 months. The Associated Press
