by Calculated Risk on 9/19/2007 09:21:00 AM

The Census Bureau reports on housing Permits, Starts and Completions.

Seasonally adjusted permits fell sharply:

Privately-owned housing units authorized by building permits in August were at a seasonally adjusted annual rate of 1,307,000. This is 5.9 percent below the revised July rate of 1,389,000 and is 24.5 percent below the revised August 2006 estimate of 1,731,000.

Starts declined:

Privately-owned housing starts in August were at a seasonally adjusted annual rate of 1,331,000. This is 2.6 percent below the revised July estimate of 1,367,000 and is 19.1 percent below the revised August 2006 rate of 1,646,000.

And Completions declined slightly:

Privately-owned housing completions in August were at a seasonally adjusted annual rate of 1,523,000. This is 0.2 percent below the revised July estimate of 1,526,000 and is 19.0 percent below the revised August 2006 rate of 1,881,000.

Click on graph for larger image.

Here is a graph of starts and completions. Completions follow starts by about 6 to 7 months.

My forecast is for starts to fall to around the 1.1 million units per year level; a substantial decline from the current level. Goldman Sachs' forecast is for 1.1 million units, and UCLA is for 1.0 million units.

Even with the declines in permits and starts, this report shows builders are still starting too many projects. Starts will probably fall much further incoming months.