Housing starts remain down in Q4 2010

December 2010 private, new housing starts were down 4.3% over the previous month at an annual rate of 529,000 according to Census Bureau and U.S. Department of Housing and Urban Development data.  When compared to the same time last year, housing starts were down 8.2%.

Perhaps most striking is the following long term chart which puts housing starts in an historical context.  During the most recent recession, housing starts fell to the lowest level on record.  Yes, the level of new homes is no longer falling, but neither is it recovering. 

What is unusual about this chart?  Certainly not the sharp declines in housing starts.  We have had those before.... mid-70s, early 80s, mid-80s, early 90s.  What stands out is the unnaturally long run up in housing starts from 1991 through 2007.  This uninterrupted run up is unpredecent.  Unfortunately, the market will take some time to work off the excess supply of housing.  Recent Census data highlighted on CNBC reported a near-record 18.4 million homes were vacant in the 4th Quarter 2010.