House Of Pain

Housing starts fell to their lowest level since the government started keeping track in 1959.

Initial construction of U.S. homes sank to a record low in April, according to a government report released Tuesday, as increased unemployment and skyrocketing foreclosures of existing homes deterred new builders.

Housing starts fell 12.8% to a seasonally adjusted annual rate of 458,000, down 12.8% from a revised 525,000 in March, according to the Commerce Department.

The reading is the lowest level since the government began keeping records in 1959. The second lowest reading came in January, when the rate of housing starts was 488,000.

Economists were expecting housing starts to come in at 520,000, according to a consensus estimate compiled by Briefing.com. Compared to the same month last year, privately owned housing starts were 54.2% below the revised April 2008 rate of 1,001,000.

This is good news and bad news...good news because housing starts will have to keep falling in order to stabilize the market. The bad news is even if housing starts fall to zero, there still will be millions of unsold homes on the market, and that number only increases as foreclosures add to the surplus.

What this does mean is that there's no turnaround in the housing market, and there will not be a national recovery from this housing depression until the glut of homes is resolved.

And that may take years.