Construction on new U.S. housing fell 16.8 percent in January to a seasonally adjusted annual rate of 466,000, the Commerce Department reported this week.

This is the lowest production level since World War II. Housing starts are down 56 percent compared to this time last year and they have fallen 79 percent in the last three years.
 

• Single-family housing starts were down 12.2 percent to a 347,000 seasonally adjusted annual rate.
• Multi-family buildings declined 25 percent.
• Building permits fell 4.8 percent to a seasonally adjusted annual rate of 521,000.
• Single-family permits declined 8 percent to a 335,000 annual rate.

The decline could be seen as good news if foreclosures are brought under control.

"Eventually the extraordinarily low level of new homebuilding should help get inventories of unsold homes under control, but for now the drop in new construction is being overwhelmed by the flood of fire-sale-priced foreclosed homes and short sales hitting the market, so foreclosure mitigation efforts will also be key to the inventory situation," wrote David Greenlaw and Ted Wieseman, economists for Morgan Stanley.

Source: MarketWatch, Rex Nutting