Don’t expect a rebound in home construction anytime soon.
New building permits for single-family homes fell 3% in September, the Commerce Department said today. Builders are likely anticipating a drop in demand with the expiration of the $8,000 first-time home buyer credit on Nov. 30 and are planning accordingly.
The good news is that single-family home starts increased 3.9% in September. And the annual rate for all starts, including apartment construction, has remained relatively steady since June, rising just 0.5% last month to a seasonally-adjusted annual rate of 590,000 units.
The annual rate of home starts increased 17% since the start of the year. But it fell 29% since September 2008 and is now well below historic norms. Paul Ashworth, Senior U.S. Economist for Capital Economics in Toronto, said the annual housing start rate would have to more than double to reach the historic average of about 1.5 million units.