Newspapers tend to report lower housing starts as a bad thing, indicative of further doldrums, sick large homebuilders, etc. But lower housing starts are an important part of balancing an overhang of inventory with market demand. If all the single-family homebuilders just took a one-year break from homebuilding, the major reduction in supply would really eat into supply. So when we see reductions in starts, we froth happily. AP writes:
Construction of single-family homes nationwide fell to the slowest pace in 17 years.Builders started work on single-family homes at an annual rate of 647,000 units last month, a drop of 5.3 percent from the previous month, the Commerce Department reported Thursday. It marked the slowest pace for singe-family activity since January 1991, another period when housing was going through a severe downturn.
And because of a New York anomaly, these figures mask an even bigger correction in the West:
Housing construction soared by 102.6 percent in the Northeast, reflecting the New York City surge, but fell by 12.8 percent in the Midwest, 9.4 percent in the West and 1.4 percent in the South.