Wednesday, February 16, 2011

New Residential Construction Report: January 2011

Today’s New Residential Construction Report showed notable declines for both single family permits single family starts which, considering the truly depressed level of new home construction activity, appears to suggest that housing is continuing to remain historically weak.

Single family housing permits, the most leading of indicators, declined 4.75% on a month-to-month basis to 421K single family units (SAAR) and declined a notable 17.29% below the level seen in January 2010 and an astonishing 76.59% below the peak in September 2005.

Single family housing starts declined 0.96% to 413K (SAAR) units dropping 19.18% below the level seen in January 2010 and a whopping 77.35% 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.