Chance for Housing Market Recovery in 2010

Housing production fell 4% in December to an adjusted annual rate of 557,000 units, according to the U.S. Commerce Department.  However, there is a chance the black cloud that has been looming over the housing market may soon be lifted.  Permit issuance, which can be a future sign of housing activity, rose 10.9% last month to a seasonally adjusted annual rate of 653,000 units.

Builders have “acted prudently” and cut back production during low demand and the trend is reflected in recent builder surveys according to National Association of Home Builders Chairman, Joe Robson.

Single-family housing starts fell 6.9% in December to a seasonally adjusted rate of 456,000 and multifamily starts posted a 12.2% gain to a seasonally adjusted rate of 101,000 units.

Single-family permits rose 8.3% to a seasonally adjusted rate of 508,000 units in December while multifamily permits were up to 20.8% to 145,000 units.

Annually, year-end figures from the Commerce Department show that housing declined 38.8% to 554,000 units.  Single-family starts were down 28.7% for the year to 444,000 units while multifamily starts declined 61.1% to 110,000.

To sum it up, these 2009  figures give the first estimate of the worst year we’ve seen for housing production since the Census began recording these numbers.  Keep your fingers crossed that the sale of permit issuance will continue to rise, thus increasing the housing production rates and potentially making a much needed change for the housing market.  However, the NAHB is remaining both cautious and optimistic about recovery in 2010.

By Regions (December 2009 stats):
Northeast- down 19%

Midwest- down 18.5%

West- down .9%

South- gain 3.3%