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New residential construction increases

In October, both single family permits and starts increased from September , though both measures were tepid when compared on a year-over-year basis.

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This chart shows the annual number of single family residential housing permits (in thousands) over the past decade. After peaking in 2005, permit numbers plummeted in 2008 and have been slow to recover.

Today’s New Residential Construction Report showed that in October, both single family permits and starts increased from September with both measures continuing to show tepid results when compared on a year-over-year basis.

Single family housing permits, the most leading of indicators, increased 5.1% from last month to 434K single family units (SAAR), increasing 6.6% above the level seen in October 2010 but remaining an astonishing 75.86% below the peak in September 2005.

Single family housing starts increased 3.9% to 430K units (SAAR), but dropped 0.9% below the level seen in October 2010 and a stunning 76.41% below the peak set in early 2006.

With the substantial headwinds of elevated 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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