Devoted to Managers and those that seek to improve their management skills

For the eighth month in a row, housing starts for single-family homes in the United States dropped. With the 5.4 percent drop in November, it brought starts to their lowest level in 16 years, averaging only 829,000 units annually. Numbers that low haven't been around since April 1991. 

It's similar with building permits, as they dropped by 1.5 percent, the lowest level since 1993.

For the last year, the industry has been in a self-correction as well, with oversupply having resulted in the existing pullback of building, with the need to sell current homes before becoming more aggressive again. For single-family and multi-family homes, starts have fallen in the U.S. by 24.2 percent, with permits almost the same during that same time, plunging by 24.6 percent.

Regions where decreases in single-family starts was strongest, were in the midwest and Northeast, where they were both down 20 percent. In the Western portion of the U.S., starts decreased by a more modest 6.8 percent, while in the South they grew by 5.4 percent.

As far as the financial markets go, this really didn't have much impact, as the information and realities are pretty much factored into the market already.

What is unknown at this time, is how much the psychological effect will be on consumers, as it seems they're more leery this year, and have tightened up their pocket books so far during the Christmas season.

It's the secondary consequences of the mortgage problems that are unknown at this time, and which are the real concerns, as the potential to disrupt things far outside the financial and housing markets are a real issue.

For the retail industry, hopes are there is a pent-up demand because of terrible weather and they've held off cutting prices too much. If things don't pick up for them quick, or if poor weather continues, we'll probably see huge discounting start to emerge very quickly.
 
With the housing market, the slowdown in starting new homes isn't too much to be concerned about. Whether there was a subprime mortgage problem or not, they still must deal with supply and demand. Until their huge inventory of new homes is sold down, increasing startups doesn't make sense.

It may take another 6 months or so before we see more aggressive movement in construction starts.