Housing starts highest since May, but still in multi-year slump

Housing starts have reached a five-month high, but given how far they've fallen, that's not saying much. Housing starts have hovered near the same level for two years with no signs of rebound.

Housing starts over the past nine years (black line) show that the American housing economy has never recovered to 2006 levels. While September data shows a high since May, that's not saying much. The purple area shows the comparison to 12 months ago and the green bars show the same data, seasonally adjusted.

Today’s New Residential Construction Report showed a slight gain to both single family permits and single family starts suggesting that housing is continuing to remain weak in the wake of the expiration of the government's housing tax credit gimmick.
Single family housing permits, the most leading of indicators, increased just 0.5% on a month-to-month basis to 405K single family units (SAAR) and declined a notable 14.4% below the level seen in September 2009 and an astonishing 77.47% below the peak in September 2005.
Single family housing starts ticked up climbing 4.4% to 452K (SAAR) units but remaining 10.8% below the level seen in September 2009 and a whopping 75.21% below the peak set in early 2006.
With the substantial headwinds of rising unemployment, epic levels of foreclosure and delinquency, mounting bankruptcies, contracting consumer credit, and falling real wages, an overhang of inventory and still falling home prices, the environment for “organic” home sales remains weak and likely very fragile.

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