Bloomberg: “U.S. Housing Starts Dropped in July to 10-Year Low”

It’s not a great time to be a builder of homes, Bloomberg reports today:

Builders in the U.S. started work on the fewest homes in a decade in July as the industry showed no sign of recovering from the 18-month recession.

The greater-than-forecast 6.1 percent decrease to an annual rate of 1.381 million, followed a 1.47 million pace in June, the Commerce Department said today in Washington. Building permits also fell to a 10-year low…

“Even the most ambitious homebuilders will think twice about initiating new projects at this point,” said Lindsey Piegza, an analyst at FTN Financial in New York. “Falling prices, sluggish demand, and dwindling mortgage credit availability will continue to weigh heavily on residential construction…”

The slump in construction, which has slowed growth without stopping the expansion, shows no sign of abating. Confidence among homebuilders fell to a 16-year low this month as cancellations and lending restrictions took a toll, according to a report yesterday from the National Association of Home Builders/Wells Fargo.

Buyers are delaying purchases in hopes of further price declines, and tougher restrictions have shut some borrowers out of the mortgage market, economists said. Rising foreclosures will probably throw more properties back on the market.

See also:

Boston Herald, 7/24/07: JUNE’S A BUST ALL OVER

Single-family home sales tumbled last month by 8.3 percent statewide, and prices dropped by 4.57 percent to $334,000 compared to a year ago, according to a report released yesterday by Boston’s Warren Group, the real estate publisher and seller of data.

Condo sales plummetted statewide by 12.28 percent in June, as prices fell by 4.1 percent to $280,000, the biggest decline this year for condos, according to the Warren Group report.

The report also showed that housing market woes are spreading to western parts of the state, where downward sales and price pressures haven’t been as severe…

“It’s going to take a while,” said Mark Zandi, an economist at Moody’s, referring to a recovery. He predicted it could take years for a true turnaround…

Bay State multifamily home sales plunged 36 percent in June compared to a year ago.

The State of the State Economy – Economic Currents, 11/6/06
A substantial correction in the housing market is now underway, with falling prices and pressure for continued price declines. Inventories are up, sales are down, and the new construction pipeline is dwindling…

The MAR median price series for single family homes fell 5.3 percent in the year ending in September, while condominium prices in September were unchanged from the prior year. There is substantial market pressure for further price declines. Sales in September were 24 percent lower than the year before for single family homes, and 28 percent lower for condominiums. On a seasonally adjusted basis, sales of single family homes have been falling since mid 2004, and sales of condominiums have been falling since mid 2005. As sales have fallen, inventories have risen. Since the end of 2004, the number of active listings for single family homes rose 47 percent on a seasonally adjusted basis, while the corresponding figure for condominiums rose 67 percent.

Existing Homes Sales Drop for Fourth Straight Month
The slumping housing market raises concerns that Kohl Construction’s aggressive bid to build 31 condo units behind North Street is poorly timed. Empty, abandoned, and foreclosed homes can cause major problems for neighborhoods. If speculators buy some of the units and rent them out, financial stress may induce them to turn a blind eye to disruptive or criminal tenants, or tempt them to rent the units to larger groups of people than they would normally be expected to house.