Housing permits and starts dropped to its lowest in November which shows that the housing market is still on the decline as reported by the government.

The Commerce Department said that housing permits dropped more than 15% to an annual rate of 616,000 last month, while starts slipped about 19% to an annual rate of 625,000.

The reports were much lower than previous estimates. In a consensus opinion by Briefing.com, the Commerce Department was supposed to report an annual rate of 700,000 building permits for November.

Housing permits reached its lowest level since March 1975 in October where it just reached 730,000. Permits are good indicator to measure the immediate future of the housing market.

 The new annual rate for starts was the lowest since the department began tracking the data in 1959, and was just half of the 2005 figures when starts was at its peak.

While the declines in construction are painful for the economy, it is the only way to correct the current situation.