Interest Rate Roundup

Friday, October 17, 2008

Housing starts, building permits slump in September; SFH construction slowest since 1982

September data on housing starts and building permit issuance was just released. Here's what the numbers looked like ...

* Overall housing starts came in at a seasonally adjusted annual rate of 817,000 last month, down 6.3% from 872,000 in August. Starts were down 31.1% from 1.185 million in September 2007 and well below forecasts for a reading of 872,000. That brings the total peak-to-trough decline in starts to a whopping 64%. The peak reading for starts was 2.27 million units in January 2006.

* Building permit issuance fell 8.3% to 786,000 units from 857,000 in August. That's down 38.4% from the year-earlier reading of 1.277 million, well below forecasts for a number of 840,000, and the lowest reading since November 1981. Permit issuance is down 65.3% from the September 2005 peak of 2.263 million units.

* Breaking it down by property type, single-family starts plunged 12% to 544,000 - the lowest level going all the way back to February 1982. Multifamily starts rose 7.5% to 273,000. Single-family permitting activity dropped 3.8% to 532,000, while multifamily permitting dropped 16.5% to 254,000.

* Regionally, starts fell 20.1% in the Northeast and 16.8% in the West. They inched up 0.5% in the South and rose 5.6% in the Midwest.

2 Comments:

  • Mike-

    I think you are being misinterpreted on this thread:

    http://housingdoom.com/2008/10/17/what-do-you-mean-this-is-bad-news/

    By Anonymous brian, at October 17, 2008 at 5:46 PM  

  • Yes, that's a shame considering farther down in the same story, the extended point becomes more clear. Oh well ...

    "But the continued drop in building could actually help the struggling market rebound. Combined with rising foreclosures and a huge number of existing homes on the market, the fact that homebuilders continued to construct new homes well after the housing bubble burst led to an enormous glut of unsold homes on the market.

    "Since demand for homes remains weak, the glut will only ease if fewer new homes are built.

    "As bad as it is, it's what needs to happen," Larson said. "Construction needs to tank to restore equilibrium to supply and demand."

    By Blogger Mike Larson, at October 18, 2008 at 9:44 AM  

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