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Home Starts Sink to Record Low Level in October
In a month racked by extreme volatility and uncertainty on both Wall Street and Main Street, home builders in October responded to deteriorating housing market conditions by bringing new construction to its slowest monthly pace on record, according to figures released by the Commerce Department on Nov. 19.
“Builders are doing everything in their power to address the overhang of unsold homes on the market through aggressive inventory management, including reining in production of new homes and offering substantial home buyer incentives,” said NAHB Chairman Sandy Dunn. “But this simply isn’t enough. More must be done, and Congress and the Administration need to step in with measures that will help get consumers back into the marketplace and revive economic growth.”
“Today’s record low numbers are in sync with results of our latest home builder surveys, and are clear evidence of the need for both fiscal and monetary stimulus efforts by the federal government,” said NAHB Chief Economist David Crowe.
“In particular,” Crowe said, “Congress should consider significant consumer incentives such as expanding the first-time home buyer tax credit and providing a government buy-down of mortgage interest rates for home purchasers — policies modeled after a successful use of the same dual stimulus to housing demand in the 1974-1975 recession. Without a consumer kick-start, the downward momentum will continue longer and deeper.”
Housing starts overall declined 4.5% to a seasonally adjusted annual rate of 791,000 units in October, the lowest level since the government began tracking these statistics in 1959.
Single-family starts were down for a fifth consecutive month, falling 3.3% to 531,000 units, reaching their lowest point since October of 1981. Multifamily dropped 6.8% to 260,000 units.
Double-digit declines occurred in two out of four regions — with a 31% plunge in the Northeast (which may have been exacerbated by a recent building code change in New York City) and a 13.7% slump in the Midwest.
Meanwhile, starts in the South eked out a gain of 1.5% and the West rebounded by 7.5% following a major tumble in September.
The issuance of building permits, which can be an indicator of future building activity, was down across the board in October. Total permits registered a sharp 12% decline to 708,000 units — another all-time monthly low.
Single-family permits skidded 14.5% to a seasonally adjusted annual rate of 460,000 units in October, the lowest level since February of 1982. Multifamily permits receded to 241,000 units for the month, trailing September’s yearly pace by 12.3%.
Regionally, permit issuance was off 23.7% in the Northeast, 3.7% in the Midwest, 13.5% in the South and 8.8% in the West.
 Construction Forecast Conference Webcast Available
An on-demand webcast of the 2008 Fall Construction Forecast Conference is available for purchase.
The webcast fee includes access to the webcast archive and electronic copies of the conference handout and presentation materials. Multiple viewers in one office can purchase the webcast for one fee.
The on-demand webcast also gives viewers complete flexibility in their viewing experience — pause, skip forward and backward, or jump directly to your topics of interest.
To purchase and download the webcast, click here.
 Want to Know the Housing Forecast for the Top 100 Metros?
Find out in HousingEconomic.com’s 2008 to 2009 Metro Forecast (free preview).
Get the metro forecast with in-depth analysis, overviews and downloadable Excel tables.
To learn more, visit www.HousingEconomics.com.
 Free NAHB Kit Gives Builders Back-to-Basics Tips to Navigate the Slowdown
What was once expected to be a relatively mild housing slump following three years of record new home construction and sales has given way to a significant downturn.
To help members navigate the uncharted waters of this slowdown, NAHB has compiled a comprehensive “Back to Basics” online toolkit — the best of the basics, the tried and true and the truly new. To access the toolkit, click here.
To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar.
For assistance, call the NAHB Member Service Center at 800-368-5242.
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