Today’s New Residential Construction Report showed a notable post-housing tax gimmick pullback to both permits and starts suggesting a possible slowdown of the tepid recovery seen recently in the new home construction.Single family housing permits, the most leading of indicators, dropped 9.9% on a month-to-month basis to 438K single family units (SAAR) while remaining just 3.1% above the level seen in May 2009 but an astonishing 75.64% below the peak in September 2005.
With the substantial headwinds of rising unemployment, epic levels of foreclosure and delinquency, mounting bankruptcies, contracting consumer credit, and falling real wages, an overhang of inventory and still falling home prices, the environment for “organic” home sales remains weak and likely very fragile.
