Home Starts Fall to Lowest Level in 26 Years

Single-family housing starts dropped 12% in September to a level not seen in 26 years and construction activity has fallen by 70% since the peak of the housing boom in January 2006. The U.S. Census Bureau reported that single-family housing starts, on a seasonally adjusted annual rate, declined to 544,000 units in September compared to 618,000 in August. Compared to the year ago starts are down a stunning 42%. The multifamily sector has held up well. Single-family construction has not been this weak since the 1982 recession. The National Association of Home Builders is calling on Congress to pass another economic stimulus package with a "real" tax credit to stimulate home buying and reduce inventories. The $7,500 first-time homebuyer tax credit that Congress passed in July is really an interest-free loan that the buyer has to pay back to the government. NAHB executive vice president and chief executive Jerry Howard said fixing the tax credit and raising it to $10,000 is his group's top priority. "We want to make it a little bit richer, drop the recapture and extended it to all buyers," Mr. Howard said.