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 the last couple of month results brought much hope and even some bottom calls from other bloggers (bearish and otherwise) this month we move one step closer to the more accurate realization that the housing decline is far from over.
The combination of a high standing inventory of new homes (10.7 months of supply), elevated new home completion level and increasing foreclosures 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 construction activity dropping 42.35% nationally as compared to April 2008 and an astonishing 77.45% since the peak in January 2005.
Moreover, every region showed significant double digit declines to permits with the Northeast declining 42.9%, the Midwest declining 42.1%, the South declining 42.5%, and the West declining 41.9% 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 42.3% as compared to April 2008.
- For the Northeast, single family housing down 42.9% as compared to April 2008.
- For the Midwest, single family housing permits down 42.1% as compared to April 2008.
- For the South, single family housing permits down 42.5% compared to April 2008.
- For the West, single family housing permits down 41.9% as compared to April 2008.
Nationally
- Single family housing starts down 45.6% as compared to April 2008.
- For the Northeast, single family housing starts down 34.5% as compared to April 2008.
- For the Midwest, single family housing starts down 36.6% as compared to April 2008.
- For the South, single family housing starts down 47.6% as compared to April 2008.
- For the West, single family housing starts down 50.6% as compared to April 2008.
Nationally
- Single family housing completions down 32.1% as compared to April 2008.
- For the Northeast, single family housing completions down 36.0% as compared to April 2008.
- For the Midwest, single family housing completions down 30.7% as compared to April 2008.
- For the South, single family housing completions down 294% as compared to April 2008.
- For the West, single family housing completions down 37.2% as compared to April 2008.
