Housing Starts Fall to Multiyear Low

Construction of single-family homes fell to a new multiyear low in August as the housing finance system continued to crumble and private-sector layoffs took their toll on the homebuying public. According to figures released by the Department of Housing and Urban Development and the U.S. Census Bureau, single-family home construction fell to a seasonally adjusted annual rate of 630,000 -- a 35% drop from the level recorded a year earlier and a 2% decline from that of July. Multifamily construction fell 24% (251,000 units) compared with the level of a year earlier and 17% from that of July. The last time single-family starts were that low was January 1991 -- 604,000 units on a seasonally adjusted annual basis. Despite the horrible showing for August, the National Association of Home Builders said its builder confidence index actually rose in September for the first time in seven months. "Nearly half of the builders in our September survey indicated that they expect to see a positive impact from the tax credit in their market areas," said NAHB chief economist David Seiders. The NAHB also believes the government takeover of Fannie Mae and Freddie Mac will help keep rates low and mortgage money flowing to the public.