Guess what just happened? For the ninth month out of the past 10, housing starts continued their descent, falling 12.8% to the lowest level since 1959. The annual rate of construction stood at 458,000 units.
Obviously this is not good news. Some analysts last month thought the housing market was near a bottom, but today's numbers show that we still may have some downside pressure left.
What is so confusing is that multi-family construction fell by 46.1%, while single family housing starts rose by 2.8%. So it was the decrease in multi-family construction that powered the drop.
Added to these numbers, home prices have fallen 30% from July 2006. The median price of existing homes is down by 13.8% to $169,000 in the first quarter of this year.
Joshua Shapiro, chief U.S. economist for the consulting firm MFR, feels that the market may edge up if first time buyers get the financing they need.
Building permits, which show new potential construction, fell by 3.3% in April to 494,000 units. For the year building permits are down a whopping 50.2%.
The home builder sentiment index is a mere 16, down 78% from its peak in 2005
So to sum all this up, the housing market is sloshing around at or near bottom whichever way you look at it. We'll probably need another few months to determine if a turnaround has actually occurred.
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