Housing Starts? Stabilize THIS!
Housing Starts plummeted today to the lowest level in 6 years, as builders continue to work out from under a massively bloated inventory of unsold property.
September starts were also revised downwards by 16%, from 5.9 to 4.9%.
The WSJ observed:
"The slowdown in housing this year stands in stark contrast to the past five years, when the lowest mortgage rates in four decades had powered a housing boom that pushed sales of both new and existing homes to five consecutive records.
In a sign that starts will likely continue to fall, October building permits dropped 6.3% to an annual rate of 1.535 million; the last month permits rose was January. Economists expected permits would be up by 0.1% to 1.640 million. Permits decreased a revised 5.2% last month to 1.638 million, compared with an earlier estimated 6.3% drop to 1.619 million.
The housing weakness trimmed a full percentage point off economic growth in the July-September quarter, when the economy expanded at a tepid 1.6% rate. Housing is expected to continue acting as a drag over the next year but analysts believe the adverse effects of falling sales and construction cutbacks will not be enough to pull the country into a recession.
The October 06 Housing Starts were the weakest since July 2000, with Starts down 27% from the same period a year ago.
At present, the Housing situation will exert a much greater drag on Q4 GDP -- even more of a drag than the negative 1.1% of Q3.
Bloomberg quoted Phillip Neuhart, an economist at Wachovia, who said: "This is a shocking number. The market is going to remain weak well into next year.''
>
>
Sources:
New Residential Construction
Census Bureau
http://www.census.gov/const/www/newresconstindex.html
New Home-Building Activity Falls to Lowest Level in 6 Years
JEFF BATER
WSJ, November 17, 2006 9:17 a.m.
http://online.wsj.com/article/SB116376991880226234.html
U.S. October Housing Starts Drop to Six-Year Low
Joe Richter
Bloomberg, Nov. 17
http://www.bloomberg.com/apps/news?pid=20601087&sid=aqOnuC2sR5.M&
Friday, November 17, 2006 | 10:10 AM | Permalink
| Comments (44)
| TrackBack (0)
add to de.li.cious | 
digg this! | 
add to technorati | 
email this post
TrackBack
TrackBack URL for this entry:
http://www.typepad.com/services/trackback/6a00d8341c52a953ef00d834c9bf4253ef
Listed below are links to weblogs that reference Housing Starts? Stabilize THIS!:
Comments
Housing is so 2003. How 'bout that NMX.. :)
jb
Posted by: James Bednar | Nov 17, 2006 10:25:50 AM
The comments to this entry are closed.
