For those folks who think that home builders are only worsening the problem of unsold homes by continuing to add new inventory, new stats out by the Commerce Department show what we've already seen behind the scenes: starts have fallen to a six-decade low. From an AP story via the LATimes:
Construction of new homes plunged by a bigger-than-expected amount in September as builders slashed production yet again, putting the country on track to build the fewest homes this year in more than six decades.
A barometer of future building also dropped, falling to the weakest level in more than 25 years. Analysts blamed the renewed swoon on the financial crisis which erupted with force this fall, raising new anxieties among potential home buyers and making it harder for builders to get construction loans.
The Commerce Department reported Friday that construction of new homes and apartments dropped by 6.3 percent last month, a much bigger decline than the 1.6 percent decrease that had been expected. It pushed total production to a seasonally adjusted annual rate of 817,000 units. That's the slowest pace since January 1991, when the U.S. was in a recession and going through a similar painful housing correction...
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Friday, October 17, 2008
New home construction falls to 6-decade low
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1 comment:
Its not like anyone did not see this coming. Housing prices are falling and supply keeps on increasing. It was the only way that they could save themselves. If they cut supply for long enough then the price will go back up.
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