U.S. housing permit starts dropped 12.8% to record low

May 19, 2009 by · Leave a Comment
Filed under: Real Estate News 

With the amount of existing home inventory on the market today it is no surprise that there is a huge drop in new starts.  This trend should continue for some time, until we work through this overhang of inventory that consists of many foreclosures or new homes that never sold.

I do support a program that helps homeowners that can verify their income and prove that with a normal fixed rate mortgage, they have the ability to stay in the home.  The people that did the right thing during this housing bubble should be assist in this crisis.   Speculators should be punished so they can think next time when they make decisions based on trying to make a quick buck.  They need to know that there is risk and it is not the taxpayers responsibility to bail them out when they make bad choices (Just like the banks).

News (Reuters): 

New U.S. housing starts and permits dropped to record lows in April, while retail sales fell last week, according to reports on Tuesday that tempered optimism the nation’s recession was drawing to a close.

Housing starts fell 12.8 percent to an annual rate of 458,000 units last month, the lowest on records dating to January 1959, the Commerce Department said.

The drop reflected a 46.1 percent plunge in groundbreaking activity for multi-family units and suggested homebuilding remains a drag on the economy. Starts for single-family homes, however, rose 2.8 percent, a second straight gain that showed the worst-hit part of the market was stabilizing.

“There is some stability. When you look at the housing starts numbers, they are going to be vulnerable to kind of two steps forward, one step back,” said Nick Kalivas, vice president of financial research at MF Global in Chicago. “Housing starts are at a level where they are bottoming out.”

Shares of U.S. homebuilders fell, with the Dow Jones home construction index .DJUSHB off 0.10 percent, after surging on Monday on data showing improved sentiment among homebuilders.

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