8th Decline in a Row for Home Starts

The housing industry suffered through another miserable month in September as new construction plummeted 0.6% for a record eighth consecutive monthly decline, the government said today.

Applications for building permits dropped 4.2%.

The grim picture of an industry in deep recession was generally in line with forecasts by private economists, who expect more bad news through the first part of 1991. In August, housing starts were off 1% and building permits fell 3%.

A Commerce Department spokesman said September’s rate of approximately 1.14 million housing starts, adjusted for seasonal factors and calculated at an annual rate, was the worst showing since the recession of 1981-82.

Last month’s 1 million applications for building permits were also the worst since the last nationwide economic malaise eight years ago.

“During the first nine months of this year, 963,100 housing units were started compared with 1,074,500 units during the same period in 1989,” the Commerce Department said. “This is a decrease of 10%.”

Building permits, meanwhile, were down by about 12% over the same period last year, the department said.

“I think the bottom is pretty near,” said David Seiders, chief economist at the National Assn. of Home Builders. “We are looking for some further gradual decline into the first quarter of next year.”

White House spokesman Marlin Fitzwater tried to minimize the latest bad news about the economy, saying only that it underscored the need for Congress to pass a deficit reduction package to “get interest rates down.”

Construction of new apartment buildings of five or more units tumbled 17.8% in September, dragging down a 4.3% gain in construction of single-family homes and a 16.1% surge in apartment buildings containing two, three or four units.