The government reported Tuesday that November housing starts plummeted nearly 19 percent from October and 47 percent from a year earlier. That’s the lowest level since the government began collecting such data back in 1959.
Here’s what Patrick Newport, US Economist with IHS Global Insight, had to say about the figures in a report of his own:
This may be the worst housing report ever (data starts in 1947). Not only did housing starts, housing permits and single-family starts plunge to all-time lows, the double-digit drop in permits points to further two-digit drops in starts in December and January…
In recent months, several factors that will extend the downturn in housing starts have come into play. First, the household formation rate has slowed, as homeowners losing their jobs or homes to foreclosure have moved in with family. Second, rising foreclosure rates have driven down the prices of existing homes, pricing new homes out of the market. Third, the credit crunch has made it difficult for builders with viable projects to obtain financing. Finally, the severity of the downturn and the stock market crash has reduced demand for long-lasting goods such as automobiles and new first and second homes. These factors will continue to play a role in depressing starts in 2009.