Wikinvest Wire

Housing starts at 17-year low

Tuesday, June 17, 2008

In May, builders began construction on the fewest number of new homes since early in 1991, according to a new report by the Commerce Department. Housing starts fell 3.3 percent from a seasonally adjusted, annualized rate of 1.008 million in April to 975,000 in May, a decline of 32.1 percent from year ago levels.
Led by a rebound in multi-family construction, housing starts gained 62 percent in the Northeast, but fell 25 percent in the Midwest, 10 percent in the West, and 4.4 percent in the South.

Permits for new construction also fell, from a revised rate of 982,000 in April to 969,000 in May, a decline of 36.3 percent from this time last year.

Yesterday, the National Association of Homebuilders' Housing Market Index fell from 19 in April to 18 in May, matching an all-time low established earlier in the year, driven lower last month by reduced buyer traffic through model homes.

The bottom in housing is still not in sight.

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3 comments: said...

Think the homebuilders are finally figuring out that for a recovery to begin, they've got to work through the glut?

dearieme said...

This morning's Telegraph says that UK housing starts this year are likely to be the "lowest annual number since 1945". Oof!

Democracy Lover said...

Given that most US housing starts are in the far suburbs, should we expect this index to rise again unless gas prices decline significantly?

We may have come to the end of the cheap gas age. If so, new housing developments, new shopping malls, and new office parks will be very risky investments.

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