Housing Starts, Permits, Fall to Record Lows

Washington, DC,  Dec. 16, 2008--New housing starts and permits plunged to record lows in November, the Commerce Department reported on Tuesday.

Housing starts fell 18.9 percent to a seasonally adjusted annual rate of 625,000 units from 771,000 units in October. That was much less than the 740,000 starts Wall Street analysts expected for November.

New building permits, which give a sense of future home construction, plummeted 15.6 percent to 616,000 units from 730,000 units in October. That was also below Wall Street analyst estimates of 700,000.

The Commerce Department began keeping monthly records for for building permits in 1960, and for housing starts in 1959.

Housing starts were down 47 percent in November from the rate in November 2007 and permits down 48.1 percent. Both were the largest year-to-year drops since January 1991.

Single-family homes, which make up the bulk of new home construction, were hit hard in November. New starts fell 16.9 percent from October to a 441,000 unit rate, a record low. Permits fell 12.3 percent to 412,000 unit rate, the lowest since November 1981.

However, in the long run, the slump in new home construction could help U.S. housing market prices recover by shrinking inventory.