Wednesday, September 17, 2008
The Commerce Department reported new home construction fell to levels last seen in 1991, housing starts plunging below the seasonally adjusted annualized rate of 900,000 for only the sixth time since record keeping began in 1959.
Note that these figures are not adjusted for population growth and that doing so would make the August data the lowest on record, going back almost 50 years.
Paced by a decline of 15.1 percent in the construction of multi-family homes, housing starts fell 6.2 percent last month to an annual rate of 895,000 units following a downwardly revised rate of 954,000 in July. On a year-over-year basis, housing starts are down 33.1 percent.
Building activity declined in all parts of the country except for the West. Construction fell 14.5 percent in the Northeast, 13.6 percent in the Midwest, and 7.4 percent in the South.
Permits for new construction, a leading indicator for future building activity, dropped to an annual rate of 854,000 units in August, down 8.9 percent from 937,000 in July and permits have now fallen 36.4 percent from year-ago levels.
Not adjusting for population growth, these levels of housing starts and permits have been seen only a few times before over the last 50 years - in 1966, 1974, 1981-1982, and 1990-1991 - which, except for 1966, all occurred during recessions.