Home construction in the United States is all but coming to a halt.
Americans are on track to buy fewer new homes than in any year since the government began keeping data almost a half-century ago. Sales are just half the pace of 1963 -- even though there are 120 million more people in the United States now.
Housing starts also are down in the Tri-Cities, although not as dramatically as the national figures, according to the most recent figures available from the Home Builders Association of Tri-Cities.
In February, 94 building permits were issued for single-family homes in the Tri-Cities down from the 134 issued in January.
Home starts also are down locally compared with this same time last year. By the end of February, permits had been issued for 228 homes, down from 276 issued during the first two months of 2010.
But this year's figures still are higher than Tri-City figures for the first two months of 2009, 2008 and 2007.
The sliding sales show just how far the housing market has fallen since the bubble burst four years ago. And they're a blow to the economic recovery as it draws strength from other places.
Diminished sales have driven the median price of a new home down nationally to about $202,000, the lowest since 2003. If the sluggish sales continue, analysts say, small homebuilders will fold, meaning less competition as the market improves and higher prices later.
"The longer it goes on, the more builders will drift away from the industry altogether," said Paul Ashworth, chief U.S. economist of Capital Economics.
Ashworth noted that a surge in foreclosures is forcing down prices for previously occupied homes in many areas even faster than they're falling for new homes. As a result, new homes are less attractive to buyers.
"That's not going to change for at least another year or two," Ashworth said. "Under these conditions, you can't really see homebuilders willing to ramp up, and that's bad for buyers."
Sales of new homes plunged in February to an annual rate of 250,000, the Commerce Department said Wednesday. It was the third straight monthly drop. The pace is far below the pace economists say is healthy, about 700,000 a year.
Last year, 323,000 new homes were sold -- the worst year on record and the fifth straight year of declines. Economists don't expect this year to be any better and say it could take two years or more before sales return to a healthy pace.
In 1963, when the U.S. population was about 190 million -- compared with today's nearly 310 million -- far more new homes were sold: 560,000.
New homes have accounted for just 5 percent of all sales so far this year. They typically represent closer to 15 percent. There were just 183,000 new homes available for sale in February, the smallest supply in four decades.
Builders have responded by scaling back. In February, they broke ground on only about 40 percent of the number of homes they typically do in normal markets.
That decline is weighing down the construction industry, which in the past has fueled economic recoveries.