Characterizing residential construction as a market in a state of "continuing freefall," the Washington, D.C.-based National Association of Home Builders released December 2008 housing start data last week that showed industry construction activity plunging to all-time lows.

Total housing starts posted a 15.5 percent decline to 550,000 units in December, the lowest since the industry began annually tracking data. Much of that was driven by new single-family home starts, which posted their eighth straight monthly decline, down 13.5 percent from November to an all-time low of 398,000 units. Multifamily starts fell 20.4 percent in December to an annual rate of 152,000.

"Builders continue to be in a de facto moratorium on building in hopes of getting this inventory level under control," said NAHB chairman Sandy Dunn in a statement announcing the starts data. "With builders doing their part, Congress and the Administration must act quickly to pass a stimulus package that will stop the bleeding in the housing market."

The severity of the drop off in construction activity was hardly surprising. At a Multifamily Economic Forecast and State of the Industry report delivered last week at the International Builder Show in Las Vegas, NAHB economist Bernie Markenstein didn't mince words when it came to evaluating market conditions. "From peak to trough, this is the largest decline in housing starts since 1955," Markenstein said. "We're not talking about as bad as the depression yet, and we certainly hope we don't get there."

Markenstein said the association is forecasting a modest rebound towards the second half of the year, led primarily by single-family starts in markets not burdened with inventory overhang. "Multifamily housing does not rebound until 2010," Markenstein said at IBS. "You guys didn't overbuild, but the mix was wrong?too much high-end, luxury condo, and we're forecasting that you are behind the curve on this."

In its analysis of starts data, NAHB noted that figures from the Commerce Department show overall 2008 housing starts plunging to a record low of 904,000, down 33.3 percent from 2007. Single-family starts were down 40.5 percent for the year to 622,000 units, while multifamily starts were off by 8.8 percent to 282,000 units. Overall permit issuance for new homes and apartments declined 36.2 percent to 893,000 units, with a 41.8 percent drop on the single-family side to 570,000 units and a 23 percent decline on the multifamily side to 323,000 units.