Housing starts fell to their lowest levels since the early 1990s in November as builders looked to adjust to an extended crisis in the U.S. housing and mortgage markets. According to data released Tuesday by the Commerce Department, total starts dropped by 3.7 percent last month to a seasonally adjusted annual rate of 1.187 million units — 24 percent below year-ago levels. Single-family housing starts in November were at a rate of 829,000, the lowest such reading since April 1991. Total permits fell 1.5 percent on a monthly comparison basis to 1.152 million, the Commerce Department said; single-family permits in November dropped more sharply, registering a 5.6 percent drop in November. Completions fell 4.1 percent to a seasonally adjusted annual rate of 1.344 million. HW readers likely know that a retrenching in housing starts is a critical part in getting through the current industry downturn, which in some ways makes today’s report better news than if starts had actually increased — there is at least some acknowledgement of the problem, and a drop in permit activity suggests that builders are finally voting with their wallets to slow down the pace of building in an attempt to better match market conditions. Calculated Risk takes a look at the numbers, and concludes that while the starts report is a step in the right direction, its not nearly enough:

Even with single family starts at the lowest level since the ’91 recession, when you look at inventories and new home sales, the builders are still starting too many homes. I expect starts to continue to decline over the next several months.

I’d expect as well to see completions fall off a cliff in the next quarter or so, and as a result, take a good chunk of residential construction employment with it.