Filed under: Bad news, Economic data, Housing, Recession
U.S. housing starts plunged in March as builders continued to cut back construction in the face of the nation’s worst housing slump in more than a decade.
Housing starts totaled a 947,000 annual rate, the U.S. Commerce Department announced Wednesday (pdf) - - the lowest annualized rate since March 1991. The February housing begin statistic was revised to a 1.075-million-unit annual rate.
Economists surveyed by Bloomberg News had expected housing starts to total a 1.02 million annualized rate.
Meanwhile, building permits, a measure of future construction, fell to a 927,000 annualized rate in March from 984,000 in February.
Single-family home permits dropped 5.7% to a 680,000 pace. Construction of multifamily homes, which includes townhouses and apartment buildings, plummeted 25% to an annual rate of 247,000 in March 2008.
Economist Glen Langan told BloggingStocks Wednesday many potential homebuyers are doing what you’d anticipate them to do in a sluggish housing sector, and builders are responding accordingly. “Potential home buyers are simply delaying their home purchase, if they aren’t putting it off entirely, until the market stabilizes,” Langan said. “And builders are following that signal. They’re slicing back construction in the face of these huge home inventories.”
Langan added that he anticipates the nation’s supply of unsold homes, currently about a 9.5- to 10-month supply at present sales rates, to increase to about an 11-month supply by the summer 2008, before inventories start to work-off. A healthy home sale market typically has a 3-4 month supply of homes on the market.
Economist Glen Langan told BloggingStocks Wednesday many potential homebuyers are doing what you’d anticipate them to do in a sluggish housing sector, and builders are responding accordingly. “Potential home buyers are simply delaying their home purchase, if they aren’t putting it off entirely, until the market stabilizes,” Langan stated. “And builders are following that signal. They’re cutting back construction in the face of these large home inventories.”
Langan added that he anticipates the nation’s supply of unsold homes, currently about a 9.5- to 10-month supply at present sales rates, to increase to about an 11-month supply by the summer 2008, before inventories start to work-off. A healthy home sale market typically has a 3-4 month supply of homes on the market.
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