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.
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.