Today’s New Residential Construction Report continues to firmly demonstrate the intensity and completeness of the washout conditions that now exist in the nation’s housing markets particularly for new residential construction showing tremendous declines on both a peak and year-over-year basis to single family permits both nationally and across every region.Although last month’s results brought much hope and even some bottom calls from other bloggers (bearish and otherwise) this month we see that the downward trend is simply continuing.
The combination of a high standing inventory of new homes (12.2 months of supply), elevated new home completion level (550K annualized completed versus 337K annualized new home sales) and increasing foreclosure activity will work to push down the new home market for the foreseeable future.
Single family housing permits, the most leading of indicators, again suggests extensive weakness in future construction activity dropping 41.87% nationally as compared to March 2008 and an astonishing 77.15% since the peak in January 2005.
Moreover, every region showed significant double digit declines to permits with the Northeast declining 43.3%, the Midwest declining 35.5%, the South declining 40.3%, and the West declining 50% 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.
Declines to single family permits have contracted measurably in terms of monthly YOY declines, and the fact that we are now seeing declines of roughly 30%-50% on the back of 2006, 2007 and 2008 declines should provide a an unequivocal indication that the housing markets are by no means stabilizing.
Here are the seasonally adjusted statistics outlined in today’s report:Housing Permits
Nationally
- Single family housing permits down 41.9% as compared to March 2008.
- For the Northeast, single family housing down 43.3% as compared to March 2008.
- For the Midwest, single family housing permits down 35.5% as compared to March 2008.
- For the South, single family housing permits down 40.3% compared to March 2008.
- For the West, single family housing permits down 50.0% as compared to March 2008.
Nationally
- Single family housing starts down 49.6% as compared to March 2008.
- For the Northeast, single family housing starts down 29.9% as compared to March 2008.
- For the Midwest, single family housing starts down 47.2% as compared to March 2008.
- For the South, single family housing starts down 49.7% as compared to March 2008.
- For the West, single family housing starts down 59.6% as compared to March 2008.
Nationally
- Single family housing completions down 39.5% as compared to March 2008.
- For the Northeast, single family housing completions down 32.5% as compared to March 2008.
- For the Midwest, single family housing completions down 32.7% as compared to March 2008.
- For the South, single family housing completions down 43.7% as compared to March 2008.
- For the West, single family housing completions down 38.0% as compared to March 2008.
