More good housing news today. Housing starts and permits are down. Starts in March fell by a larger than expected 10.8% to a 510,000 annual rate while building permits issued in the month fell to a new record low, the Commerce Department reported today.
Economists were expecting March starts to fall to 540,000 from the 583,000 starts reported in February (since revised down to 572,000). All of last month's decline was due to a decline among starts of multi-family homes, which fell 42.6% to 116,000, the lowest level since January 1994. Single-family starts were unchanged at 358,000.
Declines in housing starts were only seen in the South, which fell 16.8%, and in the West, which fell 26.3% to a new record low. Starts in the Northeast rose 6.3% and starts in the Midwest rose 15.9%.
Single-family permits fell 7.4%, while multi-family permits fell 15.4% to its lowest level since April 1993. The number of permits issued in March fell in all regions of the country except for the West, where permits were unchanged. In the Northeast, permits fell 24.3% to a new record low while in the South, permits fell 10.3% to the lowest level since March 1975.
Homes still under construction fell 4.3% to 728,000, the lowest level since February 1994. The number of housing units completed in the month rose by 3.5% to 824,000.
To some, these declines are not good news. But to me, this is music to my ears because housing bottoms form when homebuilders finally stop building and give up and merge. They come when mortgage rates go really low. They come, even when foreclosures are surging, as this is a lagging indicator. (Read Foreclosures Soar in March, Up 44 Percent Over February's High)
They come when unemployment claims level out. (Initial jobless claims plunged to 610,000 in the week ended April 11, reported the U.S. Department of Labor today. That's a decline of 53,000 from the prior week, which the government revised to 663,000.) This is all beginning to happen.
The housing bottom in the hardest hit areas is here now.
We are seeing a huge wave of buying of foreclosed homes in Northern and Southern California and in Florida. The numbers are too positive to think that these, the hardest-hit areas, aren't putting in long-term bottoms. (Read So. California Home Sales Up Again; Housing Bidding Wars in California; More Optimistic Economic Reports)
When you stop new housing, it makes old housing much more valuable. This will make the public-private partnerships tempting for those who haven't been able to raise the money yet.
No one wants to call a housing bottom, that I am sure it will happen long before anyone in the main stream media calls it. Just like the recession that began in September of 2007 way before it was "official". It also means that the bottom in banks gets put in earlier, and I believe we have seen it.
I am quite confident that my housing bottom call for this summer now seems almost late!
Soon you will hear people say, "I have to buy a home now, it's too cheap to wait any longer" You will also hear people say, "The stock market's corrupt and dirty, so I might as well invest in something of substance, like a house, as they may never be this affordable again."
And I will say "I told you so." 
It's not too late to get some great deals. Foreclosures are at all time highs. Banks need to sell and raise capital. Financing has never been cheaper. And we have a ton of first time homebuyers to sell our houses to, as well as homeowners who have lost their homes and need to rent for the next 3 years as they recoup their credit. We have tremendous demand and great deals to buy, all at the same time. Talk about stars aligning!
There is no reason to pay retail for a house, even at these low levels, when you can buy wholesale (30-50% below market) and lock in a minimum of 15% net profit (after all expenses) when you buy. And I will show you how this Tuesday, April 21st, 6pm PDT in my Mastering Mini-Lab Webinar. Don't miss out! You must register in advance to attend. More here. Talk to you then!
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