Industry, Market, News

Housing starts take steep fall

 

New home construction dropped dramatically in September, according to the latest report by the U.S. Commerce Department.

Total housing starts, a forward-looking indicator of the housing market, fell 6.3 percent last month. That’s 31 percent below the pace of construction in September 2007 and the lowest reading of the index in 17 years.

Economists had predicted a drop of only 1.7 percent.

Single-family housing starts took the greatest hit, falling 12 percent from last month and almost 42 percent from last year.

In the South, total housing starts rose by 0.5 percent, though they were still 32.5 percent below last year’s numbers. Single-family starts, however, dropped 6.3 percent in September and were 42.3 percent lower than September 2007.

As bad as housing starts were in September, the numbers for issued building permits were even worse. Total applications for building permits fell 8.3 percent in September to a 27-year low.

With home prices continuing to fall, the numbers of foreclosures increasing, and a credit market that’s in shambles, homebuilders are doing everything they can to reign in construction to weather what they feel will almost certainly be a deeper downturn in the real estate market.

 

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Down, originally uploaded by Jesse Wagstaff.

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