37,100 Housing Starts In December 2008 – Down Significantly
Housing starts for the month of December were down significantly according to a report from the NAHB.
The numbers are actually worse as most of the media report the annualized number and a seasonally adjusted number.
However when you are looking for homes that started having concrete poured and nails that are being hammered in the month of December, it is 37,100.
Now 37,100 homes is nothing to sneeze at. At a $200,000 average per home that is still 7 1/2 billion dollars in economic activity created. The reality is that for those in construction and development times are lean.
For every one else though, remember we are trying to soak up inventory right now.
The less homes added to the inventory the better until we form a strong base. So while the building numbers are scary to watch, the alternatives could be much worse.
The National Association of Home Builders released results Wednesday of a monthly survey of builders’ thoughts on market prospects. Its latest, January index for sales of new, single-family homes fell to 8 from 9. “The NAHB index indicated that the drop in mortgage rates that began in November has yet to lead to any marked improvement in new-home sales,” said Abiel Reinhart, an economist at J.P. Morgan Chase Bank.
Thursday’s data on starts showed building permits decreased 10.7% to a 549,000 annual rate in December. Economists had expected permits down 0.8% to a rate of 610,000. November permits dropped 15.8% to 615,000. Permits are a sign of future construction.
December single-family housing starts decreased 13.5% to 398,000. Construction of housing with two or more units fell 20.4% to 152,000; within that category, groundbreakings of homes with five or more units — or multi-family — were 17.1% lower.
Regionally, housing starts fell 2.2% in the West, 22.2% in the South, and 24.5% in the Midwest. Starts rose 12.7% in the Northeast.
Nationwide, an estimated 37,100 houses were actually started in December, based on figures not seasonally adjusted. An estimated 40,000 building permits were issued last month, also based on unadjusted figures. via WSJ.com.
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Comment by Albany Homes on 22 January 2009:
Interesting that, according to the report, starts rose 12.7% in the Northeast – typically one of the weakest months of the year.
I know here in Albany NY that several builders I’ve spoken with reported that the last quarter of 2008 wasn’t so bad. But that being said they all said there wasn’t much in the pipeline for 2009.