February 19, 2014

FORTUNE — 2014 was supposed to be the year that the construction industry finally took off.

Sure, the real estate market recovery began in earnest sometime in 2012, as home prices finally began to rise after a half decade of post-bubble flatlining. But even as prices rose, the construction industry stayed on the sidelines, waiting for the market to work through the mass of foreclosed inventory that was weighing it down.

But eventually, analysts predicted, continued population growth and a recovering job market would mean that the U.S. would once again have to start producing a slew of new homes. As Goldman Sachs analyst Tom Teles wrote in November:

We expect construction to increase due to a significant shortfall in housing supply relative to potential demand. Both household formation and homebuilding have lagged population growth since 2008, resulting in pent-up housing demand and underbuilding of new housing supply.

But Wednesday morning the Census Bureau released data showing that, on a seasonally-adjusted basis, only 880,000 new homes had begun construction in January, 16% below the revised December estimate of 1,048,000 and 2% below the January 2013 rate of 898,000.

This comes on the heels of data indicating two straight weeks of declines in mortgage applications and a report from the National Association of Home Builders showing that its housing market index declined from 56 in January to 46 in February. Any reading under 50 indicates that builders feel that business conditions are relatively poor.

Why hasn’t the predicted boom in housing construction come to fruition? One explanation is the weather. The real estate industry is normally sedate during colder months, and this winter has been harsher than most for large swaths of the country. Jed Kolko, chief economist at real estate site Trulia, tried to estimate how much the weather would drag down real estate data being released this week. The result? Not as much as you would expect.

Koklo argues that while January was cold, it wasn’t one for the record books, as places like New York experienced colder Januaries in 2003, 2004, and 2009. Kolko found that even though parts of the country have experienced extreme weather, most of the real estate activity in the U.S. takes place in parts of the country that were largely unaffected by severe weather. Kolko writes:

The South and West together account for the majority of housing activity in the U.S. Combined, those two regions made up 76% of national construction starts and 64% of existing home sales in December. January’s harshest weather, therefore, was not where most of America’s housing activity is.

Kolko argues that we should expect extreme winter weather to have only a slight effect on construction data like today’s housing starts and the existing home sales number due later this week. In other words, Wednesday’s data should be concerning to those of us who were hoping that a construction boom would help fuel employment growth and economic recovery in 2014.

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