Housing starts, permits hit record lows in April

WASHINGTON (MarketWatch) - Optimism that the housing slump had hit bottom was damaged Tuesday when the government reported that construction on new housing projects slowed to a record low pace in April.

New construction of single-family homes and apartments plunged 12.8% to a record-low annual rate of 458,000, much weaker that the 519,000 rate expected by economists surveyed by MarketWatch.

The drop was caused by construction of multifamily housing, which fell 46.1% to a record low 78,000. This was the biggest drop since January 1994.

Starts of single-family homes rose 2.8% to a seasonally adjusted annual rate of 368,000. Single-family starts have shown some stability in the past four months.

Building permits for single-family homes rose 3.6% to 373,000.

Starts are down 54.2% in the past year, while starts of single-family homes are down 45.6%.

http://www.marketwatch.com/story//housing-starts-hit-record-low-in-april

Optimism "damaged"...hum, I thought the comment would start with "green shoots subsided"...

 

The market shrugged off the bad jobs report earlier, maybe it'll shrug this one off too.

 

It already did.

Market is VERY STRONG.

Watch out BuyLo.

 

Funny how different people view data. I am in the camp that falling housing starts are a good sign; it allows the massive inventories to get worked off without piling up more. The market would have reacted very bullish had the starts been positive, but that is actually quite negaitive as it only adds to the problem.

Go figure.

 

You are taking the positive spin.

The whole rally we have had was primarily based on housing stabilizing.

It isn't that is obvious. As soon as they can people will flood the market with supply to get any equity they can out of their houses.

Agree?

 

This economy won't be back on track until housing starts begin to climb. All of the labor and capital that building employs is the key.

 

But, the market doesn't care, it will go higher now.

 

I'm just wondering how this figures are shocking from one side and how the market is ignoring(self-denying?) it.
I mean just simple math - the report figures are annualized, and if we calculate montlhy figures for April, it's just showing half-cut for starts:
the report figures - from here - http://www.bloomberg.com/markets/ecalendar/index.html are:
Starts - Level - SAAR - previous (March/2009) - 0.510 M , Actual(April/2009) - 0.458 M.

Calculating on monthly basis, in March it was (0.510 / 12) x 3 = 0.128 totally for 3 months, in April : ( 0.458 / 12) x 4 = 0.153 totally for 4 months, which means by end of March there were 0.128/3 = 0.0426 per month houses started , and in April - 0.153 - 0.128=0.025 , so, montly drop is 25k(April)/42.6k(monthly average for Jan-March) = 42% !! , and we're talking about building season of the year..

 

There are several years worth of inventory because many foreclosures were delayed or postponed. Since the temporary halt on foreclosures is over more inventory will get included in the numbers. The housing starts number is really a non-event at this point. I agree that increasing housing starts at this point would be a bad sign overall, but what we really need is a few big public home builders to go BK.

 

The key is the ability for those companies to sell new houses, in the current environment of massive inventories and increasing foreclosures, it isn't a "if you build it they will come" economy now.