October housing starts
* Starts rose 3% to 1.229 million units at a seasonally adjusted annual rate from a 1.193 million rate in September. September's rate had previously been reported as 1.191 million units. On a year-over-year basis, starts were down 16.4% from 1.47 million in October 2006.
* Building permit issuance fell for the fifth month in a row -- by 6.6% to 1.178 million from 1.261 million. The September figure was revised from 1.226 million units. On a year-over-year basis, permits were off 24.5% from 1.56 million in October 2006. The October 2007 reading was the lowest since July 1993 (1.174 million).
* Regionally, starts rose in three of four areas (the Northeast, by 8.5%, the West, by 5.8%, and the Midwest, by 21.1%). They dropped 4.6% in the South. Permit issuance was split, with gains in two regions (Northeast, +2.1%, and West, +4.4%) and declines in the two others (-13.1% in the South, and -8.8% in the Midwest).
* Breaking down the numbers by property type, single family starts dropped 7.3% -- the seventh consecutive monthly decline. Single family starts are now running at an annual rate of just 884,000, the lowest level since October 1991. Multifamily starts jumped by 44.4%, offsetting the previous month's anomalous 35.9% drop and then some. Permit issuance dropped 8% for single-family homes and 3.4% for multifamily. Single-family permit issuance hasn't been this low since November 1991.
Overall starts were a bit better than expected thanks to a big pop in multifamily construction. But look behind the headlines and you see that the housing recession is continuing to deepen. Case in point: Both starts and permit issuance in the single family home market have plunged to the lowest level since 1991. In fact, they've declined for seven months in a row.
If there's an upside to all this, it's that lower construction activity will eventually bring housing supply back in line with demand. But it'll take a while. We have roughly 150,000 to 200,000 excess new homes on the market and about 2 million more existing homes than is customary. Meanwhile, the "demand" side of the housing equation is coming under pressure from tightening lending standards. More banks are tightening lending standards on mortgages now than at any time on record.
Bottom line: Until we see some stabilization in both supply AND demand, the elusive housing recovery is going to keep getting pushed out into the future.