The rate of single-family building-permit authorizations dropped an estimated 14.9 percent year-over-year in September and dipped 3 percent compared to August, the U.S. Census Bureau and Department of Housing and Urban Development announced today.
The seasonally adjusted annual rate for single-family housing starts, meanwhile, was down an estimated 8.7 percent year-over-year in September and rose 3.9 percent from August. This rate is a projection of a monthly total over a 12-month period, adjusted to account for typical seasonal fluctuations in construction activity.
The total permits rate in September fell 28.9 percent compared to September 2008, from 806,000 to 573,000, and was down 1.2 percent from the August 2009 rate. The total rate of housing starts dropped 28.2 percent year-over-year in September, to 590,000, while rising 0.5 percent compared to August.
The housing starts rate was below the 2 percent monthly increase in housing starts that was forecast in a survey of economists by Dow Jones Newswires.
Regionally, the rate of single-family permit authorizations sank 19.6 percent in the Northeast, 17.8 percent in the Midwest, 14.8 percent in the West and 13.1 percent in the South year-over-year in September, the federal agencies reported, and fell 8.6 percent in the Midwest, 5.2 percent in the West and 1.6 percent in the South while rising 4.7 percent in the Northeast from August 2009 to September 2009.
The rate of single-family housing starts plunged 18.8 percent in the West, 8.8 percent in the Northeast, 5.9 percent in the South and 4.6 percent in the Midwest year-over-year in September. And the rate of starts fell 14.4 percent in the West and 5.7 percent in the Midwest while rising 14.3 percent in the South and 13 percent in the Northeast, according to the report. …CONTINUED
David Crowe, chief economist for the National Association of Home Builders trade group, cited the slow-moving rate of new residential construction in continuing a call for congressional action to extend a first-time homebuyer tax credit.
"As our latest member surveys have indicated, new-home production is continuing at a very low level with few signs of improvement as builders confront the multiple challenges of a severe credit crunch for builder loans, inappropriate appraisals, and the impending expiration of the homebuyer tax credit," Crowe said in a statement.
"In particular, the fact that builders are pulling fewer permits right now is an indication of the increasing uncertainty about where this market is headed. Clearly the positive momentum we have seen in the housing market has begun to stall, and congressional action to expand and extend the tax credit may be the only way to keep us from moving back down the hill."
NAHB is pushing for an extension of the tax credit through Nov. 30, 2010 (see related article), and make it available to all homebuyers, which Crowe estimates would grow home sales by 383,000 and create 350,000 jobs in 2010, generating an estimated $16.1 billion in wages and salaries and $12.1 billion in business income.
To spur job growth, help reduce foreclosures and excess housing inventories and stabilize home values, NAHB is calling on Congress to extend the home buyer tax credit for an additional year through Nov. 30, 2010 and make it available to all purchasers of a principal residence.
“We estimate this would increase home purchases by 383,000 and create nearly 350,000 jobs in the coming year,” said Crowe, adding that it would also generate $16.1 billion in wages and salaries; $12.1 billion in business income and tax income of $11.6 billion for federal, state and local governments.
"This would provide relief for a major sector of the economy that has suffered because of regulatory excess and the inability of banks to provide the necessary funding and flexibility that would otherwise keep loans performing as scheduled," Crowe stated.
The National Association of Realtors is also among the industry groups that has been lobbying for an extension in the tax credit (see article).
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