Submitted by Naomi M on Thu, 01/17/2008 - 15:25.
Housing Slump Continues as New Starts Drop 25 Percent
Housing starts for 2007 were down 25 percent, the biggest drop since 1980, to 1.354 million according to a Commerce Department report released today.
Building permits declined by the most in 12 years, indicating the housing slump will deepen as it enters a third year. Rising foreclosures will throw even more houses onto the market, hurting property values and threatening to push the economy into recession, economists said.
Construction of single-family homes decreased 2.9 percent to a 794,000 rate, today's report showed. Work on multifamily homes, such as townhouses and apartment buildings, plunged 40 percent to an annual rate of 212,000 from the prior month.
The decrease in starts was led by a 31 percent slump in the Midwest and a 26 percent decline in the Northeast.
New home sales will probably fall another 15 percent this year after tumbling an estimated 26 percent in 2007, according to a forecast from the Mortgage Bankers Association, the industry's largest trade group. Sales of existing homes will fall 13 percent this year, the group said.
Building permits declined by the most in 12 years, indicating the housing slump will deepen as it enters a third year. Rising foreclosures will throw even more houses onto the market, hurting property values and threatening to push the economy into recession, economists said.
Construction of single-family homes decreased 2.9 percent to a 794,000 rate, today's report showed. Work on multifamily homes, such as townhouses and apartment buildings, plunged 40 percent to an annual rate of 212,000 from the prior month.
The decrease in starts was led by a 31 percent slump in the Midwest and a 26 percent decline in the Northeast.
New home sales will probably fall another 15 percent this year after tumbling an estimated 26 percent in 2007, according to a forecast from the Mortgage Bankers Association, the industry's largest trade group. Sales of existing homes will fall 13 percent this year, the group said.
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SBA-guaranteed programs for equipment, working capital and other expansion needs 
