Today’s New Residential Construction Report showed a continued pullback to single family permits and a slight improvement to single family starts suggesting that housing is continuing to retrench in the wake of the expiration of the government's housing tax credit gimmick.Single family housing permits, the most leading of indicators, dropped 1.2% on a month-to-month basis to 401K single family units (SAAR) from a downwardly revised 406K units in July and slumping a notable 16.8% below the level seen in August 2009 and an astonishing 77.7% below the peak in September 2005.
Single family housing starts ticked up slightly climbing 4.3% to 438K (SAAR) units but remaining 9.13% below the level seen in August 2009 and a whopping 75.97% below the peak set in early 2006.
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.
