Washington, DC, November 17, 2006--Starts of new homes plunged 14.6% in October to a seasonally adjusted annual rate of 1.486 million, the lowest level since July 2000, the Commerce Department estimated Friday.
Building permits fell as well, down 6.3% to a seasonally adjusted annual rate of 1.535 million, the lowest in nine years. It was the largest percentage decline in permits in seven years.
Housing starts are now down 27.4% from October 2005 levels, and building permits are down 28% on a year-on-year basis. So far in 2006, starts are down 11.1% compared with the first 10 months of 2005. Read the full government report.
October's decline was much larger than expected by Wall Street economists, who had been forecasting a 4.5% drop in starts to 1.69 million as well as a marginal decline in building permits to 1.62 million.
September's starts data were revised lower, to 1.74 million from 1.77 million. Permits were revised higher, however, to 1.638 million from 1.620 million.
The pullback in building was widespread.
October's starts fell by 26.4% in the South, marking the region's largest decline in 22 years, and by 11.7% in the Midwest and by 2.1% in the West. Starts rose 31% in the comparatively small Northeast market.
Starts of single-family homes fell 15.9% to a seasonally adjusted annual rate of 1.177 million, also the lowest since July 2000 and the largest percentage decline since 1991. Starts of multifamily units fell 9.1% to 309,000.
In the past five months, housing starts have averaged 1.70 million annualized, down from 1.79 million in the five months ended in September and 2.12 million for the comparable period ended last January.
