Single-family homes keep construction totals afloat

Builders broke ground last month on a seasonally adjusted 555,000 units, a 3.9 percent rise from October, the Commerce Department reported Thursday.

Even with the gain, housing starts are just 16 percent above the 477,000-unit pace from April 2009 — the lowest point on records dating back to 1959.

And they are down 76 percent from their peak in January 2006, and 45 percent below the 1 million annual rate that analysts say is consistent with a healthy housing market.

All the activity last month came from building single-family homes. They increased to a pace of 465,000 units, a 6.9 percent rise from October. Apartment construction fell 9.1 percent to a unit pace of 90,000.

Housing permits, a barometer of future demand, fell 4 percent to an annualized rate of 530,000, reflecting weakness in apartment construction. It marked the lowest level in permits since April 2009.

In Las Vegas, single-family home permits purchased by builders totaled 4,081 through October, an increase of 27 percent, or 871 permits, from the year-ago period, Home Builders Research reported.

The monthly permit count has remained steady during 2010 except for June, when it shot up to 894 as builders responded to the spurt in sales resulting from the federal tax credit, housing analyst Dennis Smith of Home Builders Research said.

“The reason permits are up this year is because of the tax credit. You want to know how much difference the tax credit made? Subtract those permits. Nothing else has changed,” Smith said.

More than a year after the recession ended, the housing market is struggling.

The Federal Reserve on Tuesday cited that as a reason it decided to stick with a $600 billion Treasury bond-buying program intended to bolster the economy.

Americans are trying to repair personal finances battered by the recession. So they aren’t in a rush to make big-ticket financial commitments and buy homes. Plus loans are still hard to come by. A wave of home foreclosures is keeping home prices down. That’s good for would-be buyers, but not for builders.

The weak housing market is one of the negative forces confronting a slowly improving economy. So is high unemployment, now at 9.8 percent.

The unemployment rate in Las Vegas is even higher at 14.2 percent.

“Realistically, people in the industry that I’ve talked to know Vegas is going to lag most of the country in recovery because of employment,” Smith said. “You can’t expect to see a lot of home sales and new construction with 14 (percent) to 15 percent unemployment.”

U.S. homebuilders remain uneasy about the housing market’s prospects in the months ahead, discouraged by weak job growth and millions of foreclosures, the association says. Its monthly reading of builders’ sentiment remained unchanged in December at 16.

Review-Journal writer Hubble Smith contributed to this report.