Housing Starts Hit 17-Year Low - Wall Street Journal

[steve2470]

http://online.wsj.com/article/SB122424547866844341.html?mod=googlenews_wsj

WASHINGTON -- Home construction took its third tumble in a row during September, falling to the lowest level in 17 years, and a sign points to further decline in the fourth quarter.

Housing starts decreased 6.3% to a seasonally adjusted 817,000 annual rate, after falling 8.1% in August to 872,000, the Commerce Department said Friday. Originally, Commerce reported August starts 6.2% lower at 895,000. July starts plunged 12.9%.

The September decrease was bigger than Wall Street expected. Economists surveyed by Dow Jones Newswires forecast a 1.7% drop to an annual rate of 880,000. The construction level of 817,000 was the lowest since 798,000 in January 1991.

Year-over-year, housing starts were 31% below the level of construction in September 2007.

Builders are restrained by plunging sales. The latest government report on new-home sales in the U.S. showed demand in August tumbled by 11.5% to a seasonally adjusted annual rate of 460,000, the lowest pace in 17 years. Year-over-year, new-home sales were 34.5% lower than the level in August 2007. Home prices keep falling, which curtails sales. The result -- bloated inventories of unsold homes -- is depressing prices. Inventories aren't coming down fast or enough because falling prices are curtailing sales.

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This is NOT good for McSame at all, or for the rest of us for that matter.