Housing Starts Plummet to Record Lows in December
Indicating a continuing free-fall in the housing market, production of new single-family homes and permit issuance declined by double digits in December, falling to their lowest levels on record for the month, according to U.S. Commerce Department figures released on Jan. 22. In addition, total starts and single-family starts fell to record annual lows in 2008.
Total housing starts posted a 15.5% decline to 550,000 units in December, an all-time low. Meanwhile, starts of new single-family homes posted their eighth straight monthly decline, falling to an all-time low of 398,000 units. This was down 13.5% from the previous monthly low in November. Multifamily starts fell 20.4% in December to an annual rate of 152,000.
“Builders continue to be in a de facto moratorium on building in hopes of getting this inventory level under control,” said Sandy Dunn, NAHB’s 2008 chairman. “With builders doing their part, Congress and the Administration must act quickly to pass a stimulus package that will stop the bleeding in the housing market.”
“These dismal housing production numbers are in line with our builder surveys that show a record low in confidence in the housing market,” said NAHB Chief Economist David Crowe. “Builders are addressing the supply issue. Washington policymakers must now act to boost the demand side of the equation by including a robust home buyer tax credit and mortgage rate buy down in the stimulus package that is moving through Congress.”
Overall permit issuance, which can be an indicator of future building activity, fell 10.7% to a seasonally adjusted annual rate of 549,000. Single-family permits declined 12.3% to a 363,000-unit rate, while multifamily permits fell 7.5% to 186,000 units.
Housing starts were down in three out of four regions in December, with declines of 24.5% in the Midwest, 22.2% in the South and 2.2% in the West. The Northeast registered a 12.7% increase.
On an annual basis, year-end figures from the Commerce Department showed that overall housing starts plunged to a record low of 904,000 units in 2008, down 33.3% from the previous year. Single-family starts fell 40.5% for the year to 622,000 units, while multifamily starts dropped 8.8% to 282,000 units. Overall permit issuance for new homes and apartments declined 36.2% to 893,000 units, with a 41.8% drop on the single-family side to 570,000 units and a 23% decline in multifamily production to 323,000 units.
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.