Another dreadful housing report suggests that recovery in residential construction remains some way off.
September housing starts fell 6.3% to a below-expected 817,000 units, their lowest level since January 1991. Permits dropped 8.3% to 786,000, their lowest since November 1981 and suggesting even more housing weakness ahead since they remain under starts.
Housing declines were pervasive except for five-plus unit building starts at a 5.8% overall increase — mainly in the Midwest and South — and except for multifamily permits in the Northeast. It would appear that the uncertain ownership outlook of declining home prices and still-high mortgage rates has families moving into rental apartments.
The key single-family data are equally depressing. Single-family starts fell 12% to 544,000, and single-family permits declined 3.8% to 532,000. Again, a permits level under starts suggests more weakness ahead in private homes.
New residences under construction totaled 918,000 in September, a multi-year low. The number was last lower in May 1998. Units authorized but not started totaled 152,800; this was last lower in 2002, suggesting some reluctance to build.
Overall this was another dismal report that suggests housing might continue to subtract from real growth ahead. Housing recovery will depend on home prices stabilizing and incomes rising.
Starts are down 31.1% over the year ended in September, and permits are down 38.4%.
— Market News International
