New Home Construction Hits 17-Year Low
Construction of new homes hit a 17-year low in September as homebuilders struggled to rid their inventory of previously built, unsold homes amid a lasting economic slowdown. Housing starts fell 6.3 percent in September to a seasonally adjusted rate of 817,000 -- which is 31.1 percent below the rate one year ago -- according to a joint report by the U.S. Census Bureau and the Department of Housing and Urban Development, while residential housing starts dropped 12 percent below the August figure. The Northeast saw the steepest month-over-month decline in housing starts, falling over 20 percent to about 117,000 in September. Housing starts in the Midwest actually rose a slight 5.6 percent to 133,000. Starts in the South rose 0.5 percent, and remained well ahead of the rest of the country with approximately 403,000 housing starts. Year to date, the West, obviously including the infamous California housing market, held the highest rate of slowdown in new home construction. Few economists predict a quick end to the housing recession. "We continue to believe that new homebuilding will decline another 15 percent over the course of the next year," said Morgan Stanley economist David Greenlaw ahead of the report, according to MarketWatch. As existing homes foreclose left and right, builders are left to bring the housing supply down to meet the nearly absent demand to build new homes -- in a credit-crunched market where home loans are increasingly difficult to obtain. As new home construction plunged in September, a report Thursday by The National Association of Home Builders and Wells Fargo showed that the confidence of homebuilders has tanked. See Full Story.