Downward Beat for Housing Starts Continues in August
As the housing downswing continued, new home starts fell 2.6% in August to a seasonally adjusted annual rate of 1.331 million units, according to figures released by the Commerce Department on Sept. 19. Starts were down 19.1% from a year earlier, falling to the lowest level in 12 years.
"Today's report is very much in line with what builders are reporting in our own surveys — that they are cutting back on new production and focusing on reducing their inventories by offering a variety of incentives to boost sales and limit cancellations," said NAHB President Brian Catalde.
"The housing market is still contracting, but action by the Federal Reserve to cut the federal funds and discount rates calmed the financial markets and sent a message to American consumers that our central bank intends to ensure that the economy continues to move ahead," said NAHB Chief Economist David Seiders. "This will help to support housing, especially if the Fed takes further action in the months ahead. We expect starts and permits to bottom out by mid-2008 before a systematic recovery process gets underway."
Starts of new single-family homes dropped 7.1% for the month to a seasonally adjusted annual rate of 988,000 units, 27.1% below the pace of August 2006.
Multifamily housing starts, on the other hand, climbed 12.8% in August to a seasonally adjusted annual rate of 343,000 units, pushing them 17.9% higher than a year earlier.
Total building permits fell 5.9% in August to a seasonally adjusted yearly pace of 1.307 million units, which was down 24.5% from a year earlier.
Single-family permit issuance last month declined 8.1% to a pace of 926,000 units, 27.9% below a year earlier, while multifamily permits, at 381,000 units, were unchanged from July but 14.6% below the August 2006 rate.
Brisker multifamily activity lifted starts in August 4.2% in the Midwest and 11.4% in the South. Starts skidded 18.4% in the West and 37.7% in the Northeast. In all four regions of the country, however, the construction pace was substantially off from a year earlier.
Attend the Fall Construction Forecast Conference on Oct. 24
Plan to attend NAHB's Construction Forecast Conference on Oct. 24 at the National Housing Center in Washington, D.C. The conference brings together the nation's premier housing economists and finance experts for an in-depth examination of the economic outlook for the housing industry.
Can't attend? Watch the conference webcast live.
For more information, or to register for the conference or webcast, visit www.nahb.org/cfc.
Want to Know the Housing Forecast for the Top 100 Metros?
Find out in HousingEconomic.com’s 2007-2008 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 in 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.