Ever seen one of those big, dark storm clouds over the horizon? It’s gray and ominous. That’s how the housing news seems lately.
The U.S. Departments of Housing and Urban Development and Commerce released today January’s new construction data – a.k.a housing starts. One thing’s for sure, the heady days of a few years ago have ended.
The number of building permits issued for privately-owned housing units fell 33 percent from a year earlier and 3 percent from December 2007. Still, 1,048,000 permits were issued.
Builders began construction on fewer single family homes but privately owned housing starts rose 0.8 percent from last month.
The National Association of Home Builders’ Chief Economist David Seiders had this to say:
“Single-family builders in our latest surveys have indicated that improving affordability factors and the large selection of homes on the market are helping draw more potential buyers to model homes in recent weeks.
“However, until that increased traffic of prospective buyers translates to higher home sales and significantly lower inventories, builders are doing the responsible thing to bring supply and demand back into alignment by keeping the brakes on new construction.”
Perhaps NAHB’s biggest point is “overall permit issuance, which can be an indicator of future building activity, declined 3 percent in January to a seasonally adjusted annual rate of 1.05 million units. This was the lowest overall permit issuance since November of 1991.”
The lowest in more than 16 years? Not lookin’ good.
Bloomberg News says the current climate will encourage the Fed to again lower interest rates to spur housing purchases. But will that be enough? Somehow I think some folks are worried about their job stability more than interest rates.
February 20, 2008