Housing starts in 2008 fell to the lowest level since record keeping began -- a 50-year low -- the U.S. Commerce Department announced Thursday. (pdf)

Housing starts for all of 2008 fell 33% to 904,000 -- the lowest level of new construction since the federal government began keeping records in 1959, the Commerce Department said. In 2007, housing starts totaled 1.36 million units.

In December 2008, housing starts fell to a 550,000-unit annual rate. Economists surveyed by Bloomberg News had expected December 2008 housing starts to total a 625,000 annualized pace.

Also in December 2008, building permits fell 10.7% to a 549,000 annualized pace. Economists surveyed by Bloomberg News had expected December 2008 building permits to total a 616,000 annualized rate.

Meanwhile, permits to build single-family homes fell 12.3% to a 363,000 annualized rate in December 2008.

From a business executive decision-making standpoint, there's no need to wait for the official designation of two consecutive quarters of negative GDP growth. In a near unanimous vote, 96% of economists surveyed by the National Association for Business Economics believe the United States is already in a recession.

What's more, the survey indicated that members believe the recession started in Q4 2007 or Q1 2008, with about 60% expecting a mild contraction (a real GDP decline of 1.5%), with the rest expecting a deeper recession.

For 2009, the NABE's members see the U.S. economy growing just 0.9%. Economists surveyed expect the unemployment rate to rise to 7.5% by the end of 2009.

Economist Richard Felson, who did not participate in the survey, said the sentiment expressed in the survey is in-tune with economic conditions. "With consumer spending, business investment and housing all slumping, we can't point to a growth engine to stem the downtrend," Felson said. "That points to a significant GDP slump, and the slump will be worse, if credit conditions do not normalize."

U.S. housing starts decreased 6.3% in September -- the U.S. Commerce Department announced Friday, as builders attempted to reduce supply amid the nation's worst housing slump in more than a generation. (pdf)

Housing starts fell to an 817,000 annual rate in September, the U.S. Commerce Department announced. It was the lowest housing start pace in 17 years. (pdf)

Economists surveyed by Bloomberg News had expected housing starts to total an 880,000 annualized rate in September. Housing starts for August were revised lower to 872,000 from 895,000.

Over the past four months, housing starts have averaged a 932,000 annual pace, down from 973,000 for the four months ending in August.

Further, single family home starts fell 12% to a 544,000 annualized rate in September, their lowest level in 16 years.

Also, building permits declined 8.3% in September to a 786,000 annualized rate -- a 27-year low.

In addition, housing starts are down 31.1% in the past year, single-family starts are down 42%.

U.S. housing starts fell again in August, indicating that the worst housing slump in a generation will continue to weigh on the U.S. economy.

Starts of new homes declined 6.2% in August to a seasonally-adjusted annual rate of 895,000, the U.S. Commerce Department announced Wednesday. It was the lowest new home start rate in 17 years (pdf).

Economists surveyed by Bloomberg News had expected housing starts to total a 950,000 annualized rate in August.

Meanwhile, starts of single-family homes fell 1.9% to a 630,000 annualized rate.

Economist Glen Langan said the housing market remains "a terrible market if you're trying to sell a home, and still a risky market if you're thinking of buying a home."

"Conditions vary by region, but in general the U.S. housing market remains in a deep slump. Unless you absolutely have to or you find your 'dream house,' it makes sense to a wait a few months to see if the market stabilizes, mortgage availability factors being equal," Langan said. "In most regions of the U.S. home prices and sales are falling and that's why we're seeing a declining rate of new home starts by home builders."

The nearly always-on-the-mark Bloomberg News columnist Caroline Baum reminds investors/traders -- and potential home buyers -- that one should not jump into summer by jumping into a home purchase (if you can avoid it).

Baum notes that one has to view April's 6.3% increase in existing home sales in the proper context: housing has been down so much and for so long that every incremental pop up looks like a housing sector recovery. It isn't.

New and existing home sales peaked in July 2005 and September 2005, respectively, but housing starts didn't until January 2006. The result? A massive inventory build.

A record housing recession

Single-family starts are down 63% from their January 2006 peak, easily 'topping' peak-to-trough declines of 38% in 1973-75, and 57% in 1984-1991, and approaching the 65% slide in the housing recession of 1977-1981, Baum says.

U.S. housing starts decreased 3.3% in May, the U.S. Commerce Department announced Tuesday, as builders attempted to reduce supply amid the nation's worst housing slump in a generation.

Housing starts totaled a 969,000 annual rate in May, the Commerce Department said. It was the lowest housing start pace in 17 years.

Economists surveyed by Bloomberg News had expected housing starts to total a 985,000 annualized rate in May.

Further, housing starts are down 32.1% in the past year and single-family home starts are down 41.2%. Over the past four months, housing starts have averaged a 1.02 million annual pace.

Meanwhile, building permits, a measure of future construction, decreased 1.3% to a 969,000 annualized rate in May. Single-family permits decreased 4%. Building permits have declined 36.3% in the past year.

Economist Glen Langan told BloggingStocks Tuesday many potential homebuyers are remaining in wait-and-see mode, as the housing slump persists.

U.S. housing starts increased 8.2% in April 2008 -- an upside surprise skewed by a 36% rise in multi-family unit construction. Housing starts totaled a 1.032 million annual rate in April 2008, the U.S. Commerce Department announced (pdf) Friday.

Economists surveyed by Bloomberg News had expected housing starts to total a 940,000 annualized rate in April 2008.

Still, housing starts are down 31% in the past year and single-family starts are down 42%, the largest decline for single-family starts since 1992.

Meanwhile, building permits, a measure of future construction, increased 4.9% to a 978,000 annualized rate in April 2008; single-family permits increased 4% and multi-family permits climbed 6.8% during the month.

U.S. housing starts plunged in March as builders continued to cut back construction in the face of the nation's worst housing slump in more than a decade.

Housing starts totaled a 947,000 annual rate, the U.S. Commerce Department announced Wednesday (pdf) - - the lowest annualized rate since March 1991. The February housing start statistic was revised to a 1.075-million-unit annual rate.

Economists surveyed by Bloomberg News had expected housing starts to total a 1.02 million annualized rate.

Meanwhile, building permits, a measure of future construction, fell to a 927,000 annualized rate in March from 984,000 in February.

Single-family home permits dropped 5.7% to a 680,000 pace. Construction of multifamily homes, which includes townhouses and apartment buildings, plummeted 25% to an annual rate of 247,000 in March 2008.

Economist Glen Langan told BloggingStocks Wednesday many potential homebuyers are doing what you'd expect them to do in a sluggish housing sector, and builders are responding accordingly. "Potential home buyers are simply delaying their home purchase, if they aren't putting it off entirely, until the market stabilizes," Langan said. "And builders are following that signal. They're cutting back construction in the face of these large home inventories."

Langan added that he expects the nation's supply of unsold homes, currently about a 9.5- to 10-month supply at present sales rates, to increase to about an 11-month supply by the summer 2008, before inventories start to work-off. A healthy home sale market typically has a 3-4 month supply of homes on the market.

Fannie Mae (NYSE: FNM) stock is declining this morning on news that mortgage application volume tumbled 22.6% during the week ending February 15, according to the Mortgage Bankers Association's weekly application survey. However, housing starts improved, which is helping to offset the sting of lower applications with the hope that future numbers will be better. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on FNM.

After hitting a one-year high of $70.57 in August, the stock hit a one-year low of $26.38 in November. This morning, FNM opened at $28.53. So far today the stock has hit a low of $28.05 and a high of $28.99. As of 11:00, FNM is trading at $28.80, down $0.18 (-0.6%). The chart for FNM looks bullish but deteriorating, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.

For a bearish hedged play on this stock, I would consider a June bear-call credit spread above the $45 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 4.2% return in four months as long as FNM is below $45 at June expiration. Fannie Mae would have to rise by more than 57% before we would start to lose money.

New construction of single-family homes in November fell to its weakest pace in 16 years, as builders cut back construction amid a growing supply of unsold homes, the U.S. Commerce Department announced Tuesday.

Single-family homes starts fell 5.4% in November to a seasonally-adjusted rate of 829,000, the Commerce Department said. Total starts, which include multifamily units, fell 3.7% in November, to 1.19 million units, but came in higher than the 1.17 million consensus estimate.

Meanwhile, building permits, which are a sign of future construction and one measure of housing strength/weakness, fell 1.5% to an annualized rate of 1.15, in-line with the 1.15 million consensus estimate. Single-family permits 5.6% to an annualized rate of 764,000: single-family permits are down 34% in the past year, the largest 12-month decline since 2001.

Condo starts helped to increase the annual rate for housing starts by 3% to 1.229. They were expected to fall to 1.17 from the 1.191 million in September, so that's good news. While single family home starts did drop to an 884,000 annual rate, which is the lowest rate in 16 years, multifamily home starts rose to a 345,000 annual rate. Don't get too excited though. Multifamily homes declined 36% in September, so this 44% increase is primarily because of delays in starts from September that spilled over into October.

Richard Moody, Chief Economist for Mission Residential, prefers to look at the six month moving average to see what's really happening in housing because that tends to smooth out the ups and downs of the market. The six-month moving average for single family homes is down to its lowest point since October 1992. He added, "This is not, however, the bottom, or even close to it - total housing permits fell by 4.6%, while single family permits dropped by 6.1%. This brings the moving average for single family permits to its lowest level since August 1995.

During the first week in November, consumer confidence tumbled downward to the lowest level since Hurricane Katrina, based on reports this morning. Yes -- that is the lowest level since the summer of 2005. What changed from October? Well, never underestimate the power of the media to take situations like energy prices (oil prices) and the messy house market (foreclosures and more) and extol all the bad virtues into every nightly newscast to give the public a certain perception. It happens.

The RBC Cash Index moved from over 80 to just 64 from the October to November, with the stock market's highs in October now wearing off as the DJIA settles into the sub-14,000 rage once again.

But my my, how a few weeks can change things. Oil prices consistently nearing the $100/barrel level and with so many houses on the market (and with new credit expectations for millions of buyers) caused the confidence level to plunge.

Huge losses at Merrill Lynch and Citicorp -- tied directly to subprime mortgages -- have shaken some investors as well, although they should not. Stupid decisions by financial CEOs don't make for a shaky economy, right? But then again, consumer confidence is just that - confidence. Reality can be quite different in the end.

Things keep getting worse and builders get more and more cautious. In fact, according to the Commerce Department's most recent survey, housing starts dropped 10% to an annual pace of 1.19 million in September from a 1.33 million rate in August. That's worse than economists expected. Briefing.com's survey showed economists estimated a more modest fall to 1.29 million.

We haven't seen a housing market this weak since 1993 and the future doesn't look any better. Housing permits were down 7% to an annual rate of 1.23 million in September from 1.32 in August. That's the lowest level for permits in 12 years.

This news follows the report that the Mortgage Bankers Association will release today at its annual convention indicating falling mortgage originations and a builder's confidence survey that was released Tuesday indicating that builder's confidence is at record low levels. The nation's builders are hit hard. The most recent to report was the nation's largest, D. R. Horton (NYSE: DHI), whose orders dropped by 39%. Last week, Moody's downgraded Lennar (NYSE: LEN), Centex (NYSE: CTX) and Pulte (NYSE: PHM) homes to junk bond status.

Toll Brothers Inc. (NYSE: TOL) may be worth considering for the truly adventurous and patient investor.

The luxury home builder today posted better-than-expected second quarter results. Granted, expectations were lower than a limbo poll because the Horsham, Pa.-based company already said it wasn't going to be able to hit earlier profit forecast.

Net income fell 79 percent to $36.7 million, or 22 cents per share from $174.9 million, or $1.06 per share, a year earlier. Revenue fell 19 percent to $1.17 billion The profit beat analysts' expectations of 14 cents a share, according to Reuters.

There were a few bright spots.

Toll's cancellation rate fell to 19 percent, down from 30 percent in the first fiscal quarter and 37 percent a year earlier. The backlog, though high, was $4.15 billion at the end of the quarter, down from $6.07 billion a year earlier.

This doesn't mean that the housing markes has turned. What it may indicate, though, is that slowly but surely things eventually will get better. The company. which says the overall market remains "soft," already is seeing some signs of improvement in markets such as New York City, the Philadelphia suburbs, Raleigh. Austin and Silicon Valley in California.

Shares of Toll are down about 8 percent this year. They trade at a forward price-to-earnings multiple of 18. Four analysts rate the company either a buy or a strong buy compared with 9 who consider it a hold. The average price target is $30.50. slightly higher than where it trades today.

Has the bad news already been factored into the stock? Perhaps. The shares do seem reasonably priced.

Happier times will come to Toll eventually. It's just a question of when.

There is a battle going on at the Federal Reserve. However, it's not the internal battle that we normally envision. This is a battle of wills between Chairman Ben Bernanke and the experts on Wall Street.

On one side, we have Dr. Bernanke, the current Chairman of the Federal Reserve. He has made it quite clear that he sees no reason to change interest rates for the foreseeable future unless economic data indicates a need to do so or a crisis occurs. He believes that the housing slowdown is contained, and that the gradual slowing of the economy should contain inflationary pressures.

On the other hand, we have the Wall Street experts. They believe that the economy is much worse than the data indicates with a potential recession on the horizon. In their view, it is only a matter of time before the Fed is forced to lower rates. By the way, Wall Street has a slight conflict of interest here since lower rates or the expectation of them in the near future will probably fuel a stock market rally.