Housing Starts / Building Permits Drop to Levels Not Seen Since January, 1991

The news:

"Initial construction of U.S. homes fell to a fresh 17-year low in September, according to a government report released Friday.

Privately owned housing starts fell to a seasonally adjusted annual rate of 817,000 in September, according to the Commerce Department. The rate was down 6.3% from August's revised reading of 872,000 and 31.1% lower than September 2007." - (CNNMoney.com)

It's ugly and getting uglier:

Housing starts have fallen nearly two-thirds from their peak of 2.3 million in January 2006, and were at the lowest annual pace since January 1991.

'This is bad news for anyone who works in the housing industry, bad news for the economy as a whole, and the decline in housing activity just continues to deepen,' said Mike Larson, an analyst for Weiss Research. 'This is one of the worst downturns in the housing market in the history of our country.'

A bright spot:
Lower inventory levels will ultimately turn this housing market around (simple supply and demand economics). There is demand, there's no credit, and there's too many homes.