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Slump in Housing Starts Intensified in November
Indicating that the ongoing decline in housing and the economy is accelerating, starts and permits for new housing construction fell by double digits to new record lows in November, according to U.S. Commerce Department figures released on Dec. 16. The month’s total housing starts declined 18.9% to a seasonally adjusted annual rate of 625,000 units and building permit issuance was down 15.6% to a 616,000-unit yearly pace.
“The steep declines in home production that were reported today are in keeping with the extremely poor sales conditions that builders are seeing in their markets, as indicated by our most recent member surveys,” noted NAHB Chairman Sandy Dunn.
“Builders are doing exactly what they should be doing — they are actively reducing their inventories, virtually to the point of no longer building, in order to avoid adding more product to the marketplace,” she said. “Congress and the Administration now need to do their part and ‘fix housing first’ in two ways. One is by stimulating demand, which will help put a floor under home values, and the other is by aggressively addressing the foreclosure problem.”
“November’s report for new home production and permit issuance indicates not only that conditions aren’t improving in the housing market, but that the situation is getting worse and downward momentum seems to be building amid a deteriorating economy and mounting job losses,” said NAHB Chief Economist David Crowe.
“What we’re looking at are dramatic declines to the lowest levels in home production that have been seen since the government started keeping track in 1959,” he said. “Government interventions in the form of a significantly enhanced home buyer tax credit and reduced mortgage rates for home purchases are absolutely necessary to help pull housing and the broader economy out of this worsening tailspin.”
Starts of new single-family homes declined nearly 17% to 441,000 units in November (a new record low), while starts of multifamily homes fell 23.3% to 184,000 units.
Combined single-family and multifamily starts dropped by double digits in every region last month. Production fell 34.6% in the Northeast, 23.1% in the Midwest, 15.6% in the South and 16.8% in the West.
Permit issuance, which can be an indicator of future building activity, was also down across the board in November.
Single-family and multifamily permits each registered 12.3% declines, to seasonally adjusted annual rates of 412,000 units and 215,000 units, respectively.
All four regions reported that permits were off in November, with three out of four posting slowdowns in the double-digits. Permits were down 14.7% in the Northeast, 22.1% in the Midwest, 18.7% in the South and 3.7% 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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