September Housing Starts Drop 10.2 Percent
With builders focusing on reducing their inventories in the midst of continuing turmoil in the mortgage market, total housing starts dropped 10.2% in September, according to figures by the U.S. Commerce Department on Oct. 17. Most of the decline was in multifamily housing, where a significant uptick in starts had been registered in the previous month.
Overall housing starts fell to a seasonally adjusted annual rate of 1.19 million units, the slowest since the March 1993 pace of 1.08 million units. Single-family production registered a 1.7% decline to a 963,000-unit rate, while multifamily production posted a 34.3% decline to a 228,000-unit rate.
“This report indicates that builders are taking the necessary steps to narrow the supply of unsold units on the market as buyer demand continues to be adversely affected by tightened lending standards and concerns about negative media reports on the housing market,” said NAHB President Brian Catalde.
“While there’s no question that the housing downswing continues to be played out in markets across the country, today’s numbers show that builders are pulling back on production until sales improve,” said NAHB Chief Economist David Seiders. “This is exactly what our latest builder surveys have told us.
“We do expect some additional downward movement in housing production going into next year, at which point starts should begin to stabilize as sales turn upward in the second quarter,” he added.
Building permits, which can be an indicator of future building activity, also declined in September. Overall permit issuance fell 7.3% to a rate of 1.23 million units, with single-family permits down 7.1% to 868,000 units and multifamily permits down 7.7% to 358,000 units.
Regionally, where housing starts often display significant month-to-month volatility, the Northeast posted a 45.4% gain in September while the Midwest, South and West posted declines of 28.4% , 11.7% and 10.1% , respectively.
Building permits were also down in three out of four regions, with the Midwest being the only one to post an increase for the month. While that region registered a 3% gain, permit issuance was down 4.1% in the Northeast, 2.4% in the South and 23.3% in the West.
Attend the Fall Construction Forecast Conference in October
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 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.