New Residential Construction Report: January 2008

Today’s New Residential Construction Report continues to firmly demonstrate the intensity of the total washout conditions that now exist in the nation’s housing markets and for new residential construction showing tremendous declines on a year-over-year basis to single family permits both nationally and across every region.

Single family housing permits, the most leading of indicators, again suggests extensive weakness in future construction activity dropping 40.3% nationally as compared to January 2007.

Moreover, every region showed significant double digit declines to permits with the West declining 53.8%, the South declining 37.5%, the Midwest declining 34.3% and the Northeast declining 29.7%.

Keep in mind that these declines are coming on the back of last year’s record declines.

To illustrate the extent to which permits and starts have declined, I have created the following charts (click for larger versions) that show the percentage changes of the current values on a year-over-year basis as well as compared to the peak year of 2004.

Declines to single family permits have NOW ACCELERATED measurably in terms of monthly YOY declines, and the fact that we are now seeing declines of roughly 30%-50% on the back of 2006 declines should provide a an unequivocal indication that the housing markets are by no means stabilizing.






Here are the statistics outlined in today’s report:

Housing Permits

Nationally

• Single family housing permits down 40.3% as compared to January 2007.

Regionally

• For the Northeast, single family housing down 29.7% as compared to January 2007.
• For the Midwest, single family housing permits down 34.4% as compared to January 2007.
• For the South, single family housing permits down 37.5% compared to January 2007.
• For the West, single family housing permits down 53.8% as compared to January 2007.

Housing Starts

Nationally

• Single family housing starts down 33.8% as compared to January 2007.

Regionally

• For the Northeast, single family housing starts down 16.7% as compared to January 2007.
• For the Midwest, single family housing starts down 31.1% as compared to January 2007.
• For the South, single family housing starts down 32.3% as compared to January 2007.
• For the West, single family housing starts down 49.1% as compared to January 2007.

Housing Completions

Nationally

• Single family housing completions down 32.6% as compared to January 2007.

Regionally

• For the Northeast, single family housing completions down 51.1% as compared to January 2007.
• For the Midwest, single family housing completions down 22.8% as compared to January 2007.
• For the South, single family housing completions down 35.6% as compared to January 2007.
• For the West, single family housing completions down 24.1% as compared to January 2007.

Keep in mind that this particular report does NOT factor in the cancellations that have been widely reported to be occurring in new construction.

Homebuilder Blues: NAHB/Wells Fargo Home Builder Ratings December 2007

Today, the National Association of Home Builders (NAHB) released their Housing Market Index (HMI) showing continued evidence that the new home market is experiencing a prolonged recession.

The release came along with a renewed sense of reality and some guarded, yet optimistic, outlook from Chief Economist David Seiders continues to look for an “upswing” in building activity in the second half of 2008.

“Today’s report shows that builders’ views of housing market conditions haven’t changed in the past several months, and there clearly are signs of stabilization in the HMI … At this point, many builders are bracing themselves for the winter months when home buying traditionally slows, scaling down their inventories and repositioning themselves for the time when market conditions can support an upswing in building activity – most likely by the second half of 2008.”

It’s important to understand that each component of the NAHB housing market index is now sitting at OR BELOW the worst levels ever seen in the over 20 years the data has been being compiled.

This suggests that the current severe correction has surpassed all other events seen in the last 22 years and is now firmly in uncharted territory.

Measuring builder confidence across six key data points, the builder survey has been a bellwether for the new home market since 1985.

The component measures used to formulate the overall HMI are respondent ratings on “present conditions”, “future conditions” and “buyer traffic” all of which continue to indicating significant current and future weakness as the new home market slumps its way slowly forward.

The following charts show “present conditions”, “future conditions” and “buyer traffic” both smoothed since 1986 and unadjusted since 2005 (click for larger versions).

Keep in mind that for each measure respondents are asked to assign both a “good” and “poor” rating so in each chart you will notice “good” slumping while “poor” is surging.

Homebuilder Blues: NAHB/Wells Fargo Home Builder Ratings August 2007

Today, the National Association of Home Builders (NAHB) released their Housing Market Index (HMI) showing additional evidence that the new home market is experiencing a new leg down in declines.

The release came along with what the country’s bubbliest and overly inflated housing markets should considered a significantly alarming perspective from Chief Economist David Seiders.

“There is no question that problems in the subprime mortgage sector have spilled over to other components of housing finance, including the Alt.-A and jumbo markets, delaying a revival of the single-family housing market,”

Measuring builder confidence across six key data points, the builder survey has been a bellwether for the new home market since 1985.

The component measures used to formulate the overall HMI are respondent ratings on “present conditions”, “future conditions” and “buyer traffic” all of which continue to indicating significant current and future weakness as the new home market slumps its way slowly forward, now long separated from an exceptionally disappointing spring selling season.

In fact, July’s “present”, “future” and “buyer traffic” condition results have moved even nearer to the worst levels seen since early 1991 when the nation’s housing market was slumping through its last major housing bust.

The following charts show “present conditions”, “future conditions” and “buyer traffic” both smoothed since 1986 and unadjusted since 2005 (click for larger versions).

Keep in mind that for each measure respondents are asked to assign both a “good” and “poor” rating so in each chart you will notice “good” slumping while “poor” is surging.

Homebuilder Blues: NAHB/Wells Fargo Home Builder Ratings July 2007

Today, the National Association of Home Builders (NAHB) released their Housing Market Index (HMI) showing additional evidence that the new home market is experiencing a new leg down in declines.

Measuring builder confidence across six key data points, the builder survey has been a bellwether for the new home market since 1985.

The component measures used to formulate the overall HMI are respondent ratings on “present conditions”, “future conditions” and “buyer traffic” all of which continue to indicating significant current and future weakness as the new home market slumps its way slowly forward, now long separated from an exceptionally disappointing spring selling season.

In fact, July’s “present”, “future” and “buyer traffic” condition results have moved to the worst levels seen since early 1991 when the nation’s housing market was slumping through its last major housing bust.

The following charts show “present conditions”, “future conditions” and “buyer traffic” both smoothed since 1986 and unadjusted since 2005 (click for larger versions).

Keep in mind that for each measure respondents are asked to assign both a “good” and “poor” rating so in each chart you will notice “good” slumping while “poor” is surging.