HOUSING STARTS DROP 38 PERCENT NATIONWIDE

The seasonally adjusted annual rate for privately owned housing starts declined for the 10th consecutive month in January, falling to a rate of 1.4 million units, according to figures recently released from the U.S. Dept. of Commerce.

Last month's construction pace was down 14.3 percent from December and down 37.8 percent from a year ago. Single-family starts decreased 38.9 percent from January 2006, to a rate of 1.1 million units, while starts for multifamily structures declined 34.9 percent to a rate of 276,000 units.

Builders are working to reduce their inventory levels before starting new single-family homes, according to a National Association of Home Builders (NAHB) report. "Home sales apparently stabilized late last year, but the overhang of unsold housing inventory still is quite heavy," said NAHB Chief Economist David Seiders.

"Builders have been cutting back on starts of new units to bring supply and demand back into balance."

The construction pace for single-family housing units declined across the nation in December, falling 47.8 percent in the West, 45.5 percent in the Midwest, 35.1 percent in the South, and 25.7 percent in the Northeast.

**Taken from the California Association of Realtors Bulletin, dated February 21st, 2007.