Oct. Housing Starts Lowest Since ’82

Housing starts plummeted 6% in October to their lowest level since the last recession, the government said today. And as a portent of things to come, building permit applications plunged to their lowest level since the 1981-82 downturn.

The Commerce Department said starts of new homes and apartments fell to a seasonally adjusted annual rate of 1.04 million units after declines of 2.1% in September and 1.9% in August.

Housing starts through October have declined for nine straight months, the first time that has occurred since the department began keeping records in 1959.

And the number of October starts was the lowest since 902,000 units got under way in June, 1982.

The housing industry has been in a slump for more than a year, with starts during the first 10 months of 1990 down 12.4% from the same period of 1989.

The department also said applications for building permits, often a barometer of future activity, fell 6.8% to 925,000. It was the lowest level since 913,000 applications were filed in June, 1982.

“Tighter credit conditions and plummeting demand continue to take their toll on the residential housing industry,” economists with the Mitsubishi Bank in New York wrote in their Weekly Economic Indicator Report.

The weakness resulted in the loss of 80,000 construction jobs in October, the Labor Department reported earlier. Over the last five months, the industry has seen jobs tumble by 185,000.

Analysts see no immediate improvement.

“We look for further deterioration through year-end, although the pace of decline could moderate,” economists with Fuji Securities Inc. in Chicago wrote in their weekly Perspectives.

“No upturn is expected until next spring at the earliest,” said Michael K. Evans, head of Evans Economics Inc. in Washington.

Construction of single-family units dropped 1% to 854,000 units after a 3.2% increase the previous month. Multifamily starts plunged 23.3% to 187,000 units after a 17.3% drop in September.

The Northeast, which has seen some of the slowest housing activity recently, posted the only gain in starts--up 38.5%. Starts were down 16.9% in the West, 10.4% in the South and 2.5% in the Midwest.