Housing sharply down by 14% in December, 25% in 2007 (MarketWatch) (17-01-2008)

WASHINGTON (MarketWatch) -- The Commerce Department confirmed on Thursday that new home construction was down by 14% in December to a seasonally adjusted annual rate of 1.01 million, while the number for the whole year is 24.8%.

With the huge backlog of homes builders are forced to cut back on production. Although housing is still contracting if builders stop adding supply to overbuilt markets, the housing market has a chance of recovery.

Housing starts for single-family homes in the West fell 16% to the lowest level since the data were first collected in 1959.

National housing starts were lower than the 1.12 million pace expected by economists surveyed by MarketWatch. The pace of housing starts for October and November were also revised lower.

Compared with December 2006, monthly housing starts were off 38%, the biggest year-over-year decline since 1980.

In December, single-family starts fell 3% to 794,000, the lowest monthly pace in 16 years.

Building permits, a better gauge of future activity than the volatile monthly figures on starts, fell 8% in December to a seasonally adjusted annual rate of 1.07 million, the lowest since May 1993. Single-family permits fell 10% in December to 692,000.

For all of 2007, housing starts fell 25% to 1.35 million, the lowest total since 1993. Building permits fell 25% in 2007 to 1.38 million, the lowest since 1995.

Single-family permits fell 29% in 2007 to 1.05 million, the lowest since 1992.

Housing completions dropped 8% in December to a seasonally adjusted annual rate of 1.30 million. Completions fell 24% in 2007.

Source: MarketWatch