US Commerce Department Report Finds January Housing Starts Are In Free Fall

The Nations Building News.  23 February 2009

Okay, the housing market is lousy, we get it.  This really isn’t breaking news, so I’ll skip over it, for the moment and move the remainder of the factual content below.  What I’d really like to know - and what I really wish someone could finally explain - is this:  Does the release of a gloomy report like this, along with the accompanying bad news which main-stream media is seemingly required to

heap on help or hurt?  Has the impartial media coverage actually become self-fulfilling?  Main stream media is about as impartial as the Texas Stadium crowd when the Cowboys play the Redskins in November. 

But, I digress.  In the actual story subject matter, in free fall, US housing starts and permits hurtled downward in January, the US Commerce Department reported, to seasonally adjusted annual rates of 466,000 and 521,000 units, respectively. Both represented new record lows in a downturn that has gone unbroken for seven straight months.

"Builders are continuing to exercise extreme caution in response to market conditions, particularly weak consumer demand and the large inventory of homes for sale that is being fueled by a constant flow of foreclosures," said NAHB Chairman Joe Robson.

"We are certainly optimistic that the newly signed economic stimulus package — and particularly the enhanced first-time home buyer tax credit — will help spark more consumer demand for homes going forward,” Robson said. “However, until that happens, builders have little choice but to put a hold on new construction."

Okay, I digress again.  Please read Related Post.

Single-family starts fell 12.2% in January to a seasonally adjusted annual rate of 347,000 units, a new record low, for those still tracking record lows, while multifamily starts plunged nearly 28% to a rate of 119,000 units — also a record low.

Regionally, starts plummeted nearly 43% in the Northeast and 29.3% in the Midwest. They were down 12.8% in the South and 6.4% in the West.

January permit issuance, typically an indicator of future building activity, declined 8% to a seasonally adjusted annual rate of 335,000 units on the single-family side and 1.6% to a rate of 186,000 units on the multifamily side.

Regionally, permits were down 3.3% in the Northeast, 2.4% in the Midwest, 6.9% in the South and 1.8% in the West.

Maybe that’s Obama’s solution.  If the economy continues hurtling towards earth, as he reminds us daily, housing starts will actually reach zero, thus forcing the rapid absorption of remaining inventory. Hey, that might just work. Except we’ll all be penniless and working for the government or a government bank by then.

Maybe thinking through the first gnawing question in light of my last smart ass as usual statement has caused enlightenment.  The force that really is at work here is that builders are being prudent.  Yes, those unabashed greedy capitalists are keeping a measured eye on output given economic conditions and demand.  Let’s see main stream media types give them credit for that.

At Lexington Luxury Builders we have deferred plans to start a dozen townhomes and three big custom single family homes in First Quarter 2009.  And the greedy, capitalist pig bankers I’ve heard so much about on NBC can’t be found.  No sir, my bankers are a bunch of conservative, prudent guys reminding me to be cautious.  But CNBC isn’t telling anybody about us.