Housing starts dove 18.9 percent in November, according to data released Tuesday morning by the Commerce Department. New starts fell to a seasonally adjusted annual rate of 625,000, the lowest since the DOC began keeping track in 1959.
Compared to the November 2007 figure of 1.179 million new housing starts, the current figure marks a 47 percent year-over-year decline.
All four regions of the country posted double-digit negative percentage changes in both year-over-year and month-to-month comparisons. The most dramatic percent-change decline came in the Northeast, where November housing starts fell 59.8 percent compared to November of last year.
November stats fell well below consensus estimates, which had predicted starts to come in at about 740,000 units. In October, starts were revised to a record-low annual rate of 771,000 from 791,000 previously.
Building permits also declined in November, falling to 616,000. That's down 15.6 percent from October's figure, and down 48.1 percent from a year ago.
“The steep declines in home production that were reported today are in keeping with the extremely poor sales conditions that builders are seeing in their markets, as indicated by our most recent member surveys,” noted National Association of Home Builders (NAHB) Chairman Sandy Dunn, a home builder from Point Pleasant, W.Va. “Builders are doing exactly what they should be doing – they are actively reducing their inventories, virtually to the point of no longer building, in order to avoid adding more product to the marketplace. Congress and the Administration now need to do their part and 'fix housing first' in two ways. One is by stimulating demand, which will help put a floor under home values, and the other is by aggressively addressing the foreclosure problem.”
The Commerce Department report this morning follows on the heels of the record low reading of home builders confidence. The National Association of Home Builders/Wells Fargo Housing Market Index (HMI) remained unchanged from November’s all-time low reading of 9. A reading above 50 indicates that more builders view sales conditions as good than poor.