Tuesday, December 19, 2006

Today’s New Construction Report

If ever there was a clear signal indicating that the nations housing markets are neither "stabilizing" nor “dancing on the bottom” as some in the residential real estate industry would have you believe it’s today’s “New Residential Construction Report”.

Continuing the consistent and ever worsening deterioration of the US housing market, today’s report provides unambiguous evidence that residential real estate is experiencing a protracted and atrocious decline.

Popularly (and negligently) reported as showing a “rebound” in housing starts from October to November, a little closer inspection of the numbers will provide more than enough evidence to suggest that holding an optimistic “soft landing” outlook is misguided to say the least.

Particularly interesting is that this months report show that every region is now recording high double digit year over year declines to housing permits.

Additionally, housing completions, a lagging indicator that measures the number of new homes that have actually just been completed, is now showing some significant declines which will no doubt soon begin to weigh heavy on the construction employment situation.

Here are the statistics outlined in today’s report:

Housing Permits

Nationally

  • Single family housing permits down 3.1% from October, down 33.3% as compared to November 2005
Regionally

  • For the Northeast, single family housing permits down 11.0% from October, down 28.8% as compared to November 2005.
  • For the West, single family housing permits down 2.3% from October, down 40.5% as compared to November 2005.
  • For the Midwest, single family housing permits down 5.7% from October, down 36.4% as compared to November 2005.
  • For the South, single family housing permits down 1.4% from October, down 29.4% compared to November 2005.
Housing Starts

Nationally

  • Single family housing starts up 8.1% from October, down 28.6% as compared to November 2005.
Regionally

  • For the Northeast, single family housing starts up 5.6% from October, down 13.6% as compared to November 2005.
  • For the West, single family housing starts up 1.4% from October, down 38.5% as compared to November 2005.
  • For the Midwest, single family housing starts up 1.5% from October, down 37.6% as compared to November 2005.
  • For the South, single family housing starts up 14.1% from October, down 22.1% as compared to November 2005.
Housing Completions

Nationally

  • Single family housing completions down 1.0% from October, down 5.5% as compared to November 2005.
Regionally

  • For the Northeast, single family housing completions down 12.8% from October, down 23.8% as compared to November 2005.
  • For the West, single family housing completions down 3.7% from October, down 9.5% as compared to November 2005.
  • For the Midwest, single family housing completions down 4.0% from October, down 9.3% as compared to November 2005.
  • For the South, single family housing completions up 3.5% from October, up 1.6% as compared to November 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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