Housing Starts and Permits - Record Lows

From CNNMoney.com, "Record low for housing permits, starts":

Housing permits and starts both tumbled to record lows in December, according to a government report released Thursday.

The Commerce Department said housing permits fell 10.7% from the prior month to an annual rate of 549,000 in December, while starts were down 15.5% from November to an annual rate of 550,000.

Both measures were at the lowest levels since the government started tracking the data in 1959.

Housing numbers were worse than expected to boot:

The reports also came in much worse than expected. The Commerce Department was expected to report that building permits ticked down to an annual rate of 615,000, unchanged from a revised reading for the month prior, according to a consensus estimate of economist estimates compiled by Briefing.com.

Housing starts were expected to fall to 610,000 in December from a revised 651,000 in November.

Housing permits in December were 50.6% below the year-earlier rate of 1,111,000, and housing starts were down 45% from 1,000,000.

We're already seeing this in some of the housing markets that were severely overheated during the boom:

At some point the increase in the inventory level will cause prices to come down so dramatically that bargain hunters will sneak in and start buying up excess supply, Newport said.

As the usual broken record goes. The final tidbit of this article is GOOD NEWS for housing, definitely BAD NEWS short term on some real estate and construction related jobs:

For all of 2008, the report estimates 892,500 housing units obtained building permits, which was 36.2% below the 2007 figure of 1,398,400. Meanwhile, the government estimated that 904,300 housing units were started in 2008, which is 33.3% lower than the 1,355,000 units started in 2007.

The sooner we move this inventory, the sooner housing begins to stabilize. Until then, more grim reports will follow.