Amid Wall Street volatility and Main Street uncertainty, home builders reduced the pace of new construction and permit issuance in October to the lowest levels for any single month on record, NAHB reported last week in response to U.S. Department of Commerce housing market figures
Source: National Association of Home Builders, Washington, D.C.
Amid Wall Street volatility and Main Street uncertainty, home builders reduced the pace of new construction and permit issuance in October to the lowest levels for any single month on record, NAHB reported last week in response to U.S. Department of Commerce housing market figures.
Record low numbers are in sync with results of our latest home builder surveys, and are clear evidence of the need for both fiscal and monetary stimulus efforts by the federal government, said NAHB Chief Economist David Crowe. In particular, Congress should consider significant consumer incentives such as expanding the first-time home buyer tax credit and providing a government buy-down of mortgage interest rates for home purchasers-policies modeled after a successful use of the same dual stimulus to housing demand in the 1974-1975 recession. Without a consumer kick-start, the downward momentum will continue longer and deeper. Overall housing starts declined 4.5 percent to a seasonally adjusted annual rate of 791,000 units in October, which was the slowest pace recorded for any month since the government started keeping track in 1959. Single-family starts declined for a fifth consecutive month, by 3.3 percent to 531,000 units, which was the slowest pace since October of 1981. Multifamily starts fell 6.8 percent to 260,000 units. Two out of four regions posted double-digit declines in housing starts for October, including the Northeast’s 31 percent reduction (which may have been accentuated by a recent building code change in New York City) and the Midwest’s 13.7 percent decline. Meanwhile, starts in the South eked out a gain of 1.5 percent and starts in the West bounced partway back from a major decline in the previous month with a 7.5 percent gain in October.