Indicating that the ongoing decline in housing and the economy is accelerating, starts and permits for new housing construction fell by double digits to new record lows in November, according to U.S. Commerce Department figures. Commerce reported an 18.9 percent decline in total housing starts to a seasonally adjusted annual rate of 625,000 units and a 15.6 percent decline in permit issuance to 616,000 units for the month.
"The steep declines in home production are in keeping with the extremely poor sales conditions that builders are seeing in their markets, as indicated by our most recent member surveys," said 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."
"November’s report for new home production and permit issuance indicates not only that conditions aren’t improving in the housing market, but that the situation is getting worse and downward momentum seems to be building amid a deteriorating economy and mounting job losses," said NAHB Chief Economist David Crowe. "What we’re looking at are dramatic declines to the lowest levels in home production that have been seen since the government started keeping track in 1959.
"Government interventions in the form of a significantly enhanced home buyer tax credit and reduced mortgage rates for home purchases are absolutely necessary to help pull housing and the broader economy out of this worsening tailspin."
Starts of new single-family homes declined nearly 17 percent to 441,000 units in November (a new record low), while starts of multi-family homes fell 23.3 percent to 184,000 units.
Combined single- and multi-family 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 multi-family 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.