The Commerce Department released the statistics for new home starts and permits this morning:
Of permits they said:
Privately-owned housing units authorized by building permits in May were at a seasonally adjusted annual rate of 1,501,000. This is 3.0 percent (±1.3%) above the revised April rate of 1,457,000, but is 21.7 percent (±1.3%) below the revised May 2006 estimate of 1,918,000.
According to Yahoo Finance:
Construction of new homes fell in May as the nation’s homebuilders continued to struggle with a steep housing slump that has been exacerbated by rising problems with mortgage defaults.
The Commerce Department reported Tuesday that construction of new homes and apartments dropped by 2.1 percent last month, the poorest performance since a huge 13.9 percent plunge in January.
The May decline was in line with expectations and reflected weakness in the South and West, which offset construction gains in the Northeast and Midwest. The decline, which followed small gains in April and March, left construction 24.2 percent below the level of a year ago.
While builders have pulled way back, the question remains, is the pullback enough to make a dent in inventory? According to Richard Moody, chief economist for Mission Residential:
The data seem eerily calm. Simply put, there is too much inventory lingering in the market, and the most recent data suggesting rapid growth in the number of foreclosures mean the inventory overhang will become more severe, particularly with higher mortgage rates taking a bigger bite out of demand
It’s about time they cut back.
I think most of the builders were drinking the “we’ve hit bottom!” and “the upturn is just around the corner!” Kool-Aid for the last year and a half .. and the pitcher’s finally empty.
NVMike-
HBs are cutting back, but then again, so are buyers.
The Commerce Dept. reports how many homes are sold, and how many homes are started, so you would think it would be a fairly easy matter to compare those stats and find out if they are digging out of their hole or not.
The reality is, that’s hard info to come by. There’s no question the builders have cut back- but at least in the markets I watch, there is still way too much inventory- these guys are going to be in pain for awhile.
Let’s see if we can get the Repugnant to send a reporter over to the HBs and ask them how many staffers and vatos they have laid off or are laying off. Ahh, never mind, that comes a little too close to investigative reporting for the Repugnant.
I will not confuse the media with journalism
I will not confuse the media with journalism
I will not confuse the media with journalism
New idea: Let’s see if we can get the Repugnant to cut ad rates for the HBs so we can have 2-page spreads touting the virtue of owning your own dream McCastle in Maricopa (“map not to scale”). “Phase 3 units are selling fast!”
Who’s with me?