The monthly report on new residential construction issued by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development showed permits for privately-owned building permits for residential construction being issued at a rate drop of 2.8 percent below the revised June rate of 22.6 percent below the revised estimate in July one year ago.
Builders were holding around 194,000 permits on which construction had not yet begun in July compared to 206,900 in June. A staggering 103,800 of those permits were in the Southern states as were nearly 50 percent of the 117,500 unused permits for single family construction.
So why are you just sitting there watching your money fly out the window???
Not surprisingly, builder confidence is also eroding. The latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI) took another hit in August, reaching its lowest level in over16 years.
The HMI asks builders to respond to three measures of confidence each month; how they measure current single-family home sales and what they expect from those sales over the next six months - both on a scale of "good," "fair," or "poor," and whether current traffic of prospective buyers is "high to very high," "average," or "low to very low." Each measure is ranked separately and then used to calculate a seasonally adjusted index. Any number over 50 for the components or the main index indicates that more builders view sales conditions as positive rather than negative.
