s skippy the bush kangaroo: housing starts? more like housing stops

skippy the bush kangaroo

Friday, November 17, 2006

housing starts? more like housing stops

further proof that the tax cuts for the rich are helping the economy grow strong, housing starts slid to their lowest point in 6 years last month. msn money:

the government said starts fell to a seasonally adjusted annual pace of 1.49 million new homes, down 14.6% from september and 27.4% from october 2005.

bloated inventories and weakening home sales contributed to the drop. economists had been looking for a 5.6% fall to a 1.67 million annual rate.

home-building permits fell for the ninth month in a row, dropping more than 6% to the lowest pace since december 1997. the drop in permits, which are often a measure of builder confidence in the real estate market, is a signal that housing starts could continue to fall -- and a sign that the slump isn't over yet.

"this is a shocking number," phillip neuhart, an economist at wachovia, told bloomberg news. "the market is going to remain weak well into next year."

other economists said the decline was not such terrible news. "the faster builders address their bloated inventories and bring the pace of home construction down, the quicker the housing correction will play out and the economy can return to a more normal footing," stephen stanley, the chief economist for rbs greenwich capital, told marketwatch.com.

the sharp slowdown in housing this year stands in stark contrast to the past five years, when the lowest mortgage rates in four decades powered a housing boom that pushed sales of both new and existing homes to five consecutive records.

other data this week suggested the housing market may be at or near a low. the national association of homebuilders/wells fargo housing market index on thursday got a two-point bump to 33 points in november. the survey hit at 15-year low of 30 in september.

on wednesday, the mortgage bankers association reported that applications for u.s. home mortgages had risen last week to their highest level since january as falling interest rates encouraged more loan refinancing.

msn money video: diana olick says the housing market faces more suffering.
posted by skippy at 2:37 PM |


commented by Blogger Eat More Beef, 3:02 AM PST  

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