Mortgage Rate News

One of the lead indicators of the health of the housing market is how many housing starts there are. Another indicator is the number of building permits issued. Today, though, the news looks pretty bleak, as December housing starts and permits show a drop. Mortgage News Daily reports on today’s housing market data:

Housing starts, which refer to the pace of new homes being built, are expected to drop more than 2% in the final month of 2008, following a huge 19% decline in November, which pushed the annual decline down to 47% – the worst annual decline in the housing market in 18 years.

The annualized pace of housing starts is currently at its lowest level in half a century at 625k, and when the December numbers roll in that figure is expected to fall to 605k.

As the recession marches forward, and as would-be homebuyers are unwilling or unable to get approved for a new home, activity is likely to continue to slow. Additionally, supply of older homes is contributing to fewer new homes, since it is possible to buy foreclosures – and homes in danger of foreclosure — for less than new homes. As the foreclosure crisis mounts due to unemployment and other factors, supply will only increase.

Other economic data for today

In addition to the housing market news, unemployment data was released today. Unemployment keeps increasing to new highs. However, the data doesn’t take into account those whose hours have been cut. The underemployed are also adding to the problems with the economy, since many people are making less than they were before — even if they still have their jobs.

So far, the news has been pretty bad regarding the economy, and that is creating further pessimism with regard to recovery — even as Timothy Geithner passes confirmation for Treasury Secretary and plans to aggressively confront the problems facing the economy.