Housing Construction Drops 50-Year Low

NATIONAL NEWS - The US Commerce Dept released statistics earlier this week which report a record drop in residential construction starts and permit requests. The 18.9 percent decline in total housing starts, a seasonally adjusted annual rate of 625,000 units, was matched by a 15.6 percent decline in permit issuance to 616,000 units per month. Both represent the continuing decline in the housing market and the economy.

"The steep declines in home production that were reported today are in keeping with the extremely poor sales conditions that builders are seeing in their markets, as indicated by our most recent member surveys," noted National Association of Home Builders (NAHB) Chairman Sandy Dunn, a home builder from Point Pleasant, W.Va. "Builders are doing exactly what they should be doing - they are actively reducing their inventories, virtually to the point of no longer building, in order to avoid adding more product to the marketplace. Congress and the Administration now need to do their part and 'fix housing first' in two ways. One is by stimulating demand, which will help put a floor under home values, and the other is by aggressively addressing the foreclosure problem."

NAHB Chief Economist David Crowe says that November's dramatic declines are the lowest levels of home production since records started being kept in 1959.

Starts of new single-family homes declined nearly 17 percent to 441,000 units in November (a new record low), while starts of multifamily homes fell 23.3 percent to 184,000 units. Combined single- and multifamily starts dropped by double digits in every region last month. The Northeast posted a 34.6 percent decline, while the Midwest posted a 23.1 percent decline, the South posted a 15.6 percent decline and the West posted a 16.8 percent decline.

Permit issuance, which can be an indicator of future building activity, was also down across the board in November. Single-family and multifamily permits each registered 12.3 percent declines, to seasonally adjusted annual rates of 412,000 units and 215,000 units, respectively. All four regions reported declining permits, with three out of four posting double-digit declines. The Northeast registered a 14.7 percent decline while the Midwest reported a 22.1 percent decline, the South posted an 18.7 percent decline and the West posted a 3.7 percent decline.