According to the National Association of Home Builders (NAHB), new home construction fell to the lowest level in 14 years as homebuilder confidence fell for the eighth consecutive month to hit the lowest level since the trade group began gauging sentiment in 1985.

Total Home Starts September 2007
Seasonally-Adjusted Annual Rate: 1.191 million units

One Month Change: Down 10.2%
One Year Change: Down 30.8%

Single-Family Starts
Seasonally-Adjusted Annual Rate: 963,000 thousand units

One Month Change: Down 1.7%
One Year Change: Down 30.8%

Total Building Permits: 1.226 million units

One Month Change: Down 7.3%
One Year Change: < b>Down 25.9%

“This report indicates that builders are taking the necessary steps to narrow the supply of unsold units on the market as buyer demand continues to be adversely affected by tightened lending standards and concerns about negative media reports on the housing market,” said NAHB President Brian Catalde.
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NAHB Chief Economist David Seiders added, “While there’s no question that the housing downswing continues to be played out in markets across the country, today’s numbers show that builders are pulling back on production until sales improve.

“This will help to support housing, especially if the Fed takes further action in the months ahead. We expect starts and permits to bottom out by mid-2008 before a systematic recovery process gets underway.

“This is exactly what our latest builder surveys have told us. We do expect some additional downward movement in housing production going into next year, at which point starts should begin to stabilize as sales turn upward in the second quarter.”

Home Builder Outlook on the Future
Note: A score over 50 means more builders view conditions positively, a score under 50 means more view them negatively.

Overall Builder Confidence: 18
One Month Ago: 20

Single-Family Home Sales: 18
One Month Ago: 20

Sales Over Next Six Months: 26
One Month Ago: 26

Traffic of Prospective Buyers: 15
One Month Ago: 16

“Builders in the field are reporting that, while their special sales incentives are attracting interest among consumers, many potential buyers are either holding out for even better deals or hesitating due to concerns about negative and confusing media reports on home values,” said Catalde.

Seiders continued, “Consumers are still trying to sort out market realities and get the best deals they can.

“Many prospective buyers may very well have unrealistic expectations regarding new-home prices as well as how much they can expect to receive for their existing homes. When the market is in proper balance, people can recognize a good deal when it comes along; at this point, they view a good deal as a moving target.”