Subtitle: Not Going Down Easy… But Still Going Down!Today’s New Residential Construction Report was another blow to the “Green Shoots” crowd with single family permits declining on a month-to-month basis in all regions except the northeast.
The latest results continue to indicate that the increase in new construction activity that occurred between March and July was NOT the start of an “organic” V-shaped housing recovery but rather an induced bounce brought on by the government homebuyer tax handout which worked to fuel unusually strong seasonal activity (… thus thwarting seasonal adjustment) from pent-up demand sidelined by the epic financial panic at the end of 2008.
It’s important to consider that at 501K single family units (SAAR), the level of national housing starts still remains substantially below that seen in October 2008.
Single family housing permits, the most leading of indicators, again suggests declining future construction activity dropping 14.93% nationally as compared to September 2008 and an astonishing 74.97% since the peak in January 2005.
Moreover, every region showed significant double digit declines to permits with the Northeast declining 19.6%, the Midwest declining 17.8%, the South declining 13.1%, and the West declining 14.8% on a year-over-year basis.
Keep in mind that these declines are coming on the back of the last three years of record declines.
To illustrate the extent to which permits and starts have declined, I have created the following charts (click for larger versions) that show the percentage changes of the current values on a year-over-year basis as well as compared to the peak year of 2004.
Here are the seasonally adjusted statistics outlined in today’s report:Housing Permits
Nationally
- Single family housing permits down 14.93% as compared to September 2008.
- For the Northeast, single family housing down 19.6% as compared to September 2008.
- For the Midwest, single family housing permits down 17.8% as compared to September 2008.
- For the South, single family housing permits down 13.1% compared to September 2008.
- For the West, single family housing permits down 14.8% as compared to September 2008.
Nationally
- Single family housing starts down 8.7% as compared to September 2008.
- For the Northeast, single family housing starts down 8.8% as compared to September 2008.
- For the Midwest, single family housing starts down 4.6% as compared to September 2008.
- For the South, single family housing starts down 5.9% as compared to September 2008.
- For the West, single family housing starts down 18.8% as compared to September 2008.
Nationally
- Single family housing completions down 43.1% as compared to September 2008.
- For the Northeast, single family housing completions down 27.5% as compared to September 2008.
- For the Midwest, single family housing completions down 49.7% as compared to September 2008.
- For the South, single family housing completions down 40.8% as compared to September 2008.
- For the West, single family housing completions down 48.3% as compared to September 2008.
