Friday, November 17, 2006

Today’s New Construction Report

Continuing the consistent and ever worsening deterioration of the US housing market, today’s “New Residential Construction Report” provides significant evidence that residential real estate is experiencing a protracted and widespread decline.

As MarketWatch has previously reported, today’s release, showing housing starts plunging to a six year low, should dash any an all hopes that a bottom has been found in the housing market.

Particularly interesting is that this months report show that virtually every indicator is now recording high double digit year over year declines, with the West region again breaking over 40% in declines to housing permits.

Additionally, both permits and starts are now down over 30% nationally with permitting being particularly important as it is a leading indicator of future housing starts.

Here are the statistics outlined in today’s report:

Housing Permits

Nationally

  • Single family housing permits down 3.8% from September, down 31.7% as compared to October 2005
Regionally

  • For the Northeast, single family housing permits up 2.1% from September, down 23.3% as compared to October 2005.
  • For the West, single family housing permits down 9.7% from September, down 41.8% as compared to October 2005.
  • For the Midwest, single family housing permits down 3.0% from September, down 33.9% as compared to October 2005.
  • For the South, single family housing permits down 2.2% from September, down 26.9% compared to October 2005.
Housing Starts

Nationally

  • Single family housing starts down 15.9% from September, down 31.8% as compared to October 2005.
Regionally

  • For the Northeast, single family housing starts up 10.9% from September, down 22.2% as compared to October 2005.
  • For the West, single family housing starts down 9.1% from September, down 32.9% as compared to October 2005.
  • For the Midwest, single family housing starts down 7.3% from September, down 33.1% as compared to October 2005.
  • For the South, single family housing starts down 24.8% from September, down 32.4% as compared to October 2005.
Keep in mind that this particular report does NOT factor in the cancellations that have been widely reported to be occurring in new construction.

As further reports are released, cancellations should show an even greater effect on permitting, starts and completions.

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