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Date: 9/17/2008
Authors: Originator Times

News Bite

Housing Starts Decline 6.2 Percent In August

Nationwide housing starts declined 6.2 percent to a seasonally adjusted annual rate of 895,000 in August, according to figures released by the U.S. Commerce Department. That marks the slowest production pace since January 1991. Single-family starts fell 1.9 percent to 630,000 units, while multifamily starts – still evening out after a huge bump in June that was tied to a New York City building code change – declined 15.1 percent to 265,000 units.

“Builders understand that there is still a substantial amount of unsold inventory to be worked down, and they continue to do the right thing by reducing production and pulling fewer permits for new homes to help restore better balance between supply and demand,” noted Sandy Dunn, National Association of Home Builders (NAHB) president and a home builder from Point Pleasant, W.Va. “With help from the new first-time home buyer tax credit and improving rates on home mortgages, the long downswing in production activity is slowly but surely putting us back on track to a healthy housing market.”

Two out of four regions posted double-digit declines in total housing starts for August, including the Northeast (down 14.5 percent) and the Midwest (down 13.6 percent). The South posted a 7.4 percent decline in housing starts in August, while the West registered a 10.8 percent gain following an equivalent decline in July.

Permit issuance, which can be an indicator of future building activity, also fell to a 17-year low in August. Total permits were down 8.9 percent to a seasonally adjusted annual rate of 854,000 units, with single-family permits down 5.1 percent to 554,000 units and multifamily permits down 15 percent to 300,000 units. On a regional basis, total permits fell 21 percent in the Northeast, 9.9 percent in the South and 7.1 percent in the West. Permit issuance edged up by 0.7 percent in the Midwest.

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