Single-Family Starts Drop 12.2% to Another Low

Single-family housing starts fell 12.2% in January from December to another all-time low as demand for new homes and construction activity appears to be falling off a cliff. "Decline permits over the previous three months point to significant declines in starts during February and March," said economist Patrick Newport at HIS Global Insight. The U.S. Census Bureau reported that single-family housing starts declined from a seasonally adjusted annual rate of 395,000 in December to 347,000 in January - down 53.7% from January 2008. Mr. Newport noted that household formation has slowed and the severity of the downturn has reduced demand for first and second homes. In addition, "rising foreclosure rates have driven down the prices of existing homes, pricing new homes out of the market," the Global Insight economist said.