According to a U.S. Commerce Department report released this morning, construction of new homes dropped in October to a seasonally adjusted annual rate of 791,000, the lowest level on government records dating back to 1959. This is 4.5 percent below the revised September estimate of 828,000 and 38 percent below the October 2007 rate.
Housing starts fell month-over-month by 31 percent in the Northeast, a new record low, and 13.7 percent in the Midwest, while the South and West managed slight gains of 1.5 percent and 7.5 percent respectively. All regions saw substantial year-over-year declines: 51.6 percent in the Northeast; 38.2 percent in the Midwest; 33.9 percent in the South; and 39.1 percent in the West.
Permits for new construction fell 12 percent in October to an annual rate of 708,000 units, the lowest on record. This is 40.1 percent below the revised October 2007 estimate of 1.18 million units.
A related report released yesterday shows builder confidence in the single-family home market also has dropped to a record low. Deepening problems in the financial markets, job market weakness and overwhelming uncertainty about the economy continued to impact consumers, according to the latest NAHB/Wells Fargo Housing Market Index (HMI)