Posted on 02/16/2007 5:55:00 AM PST by shrinkermd
Home construction fell to its lowest point in nearly 10 years during January in an unexpectedly large decrease that erased hopeful gains posted in two prior months.
A separate report showed wholesale prices fell last month, after two strong months of gains, suggesting that underlying inflationary pressures remain broadly contained. Core prices, however, which exclude volatile food and energy costs, rose.
Housing starts plunged by 14.3% to a seasonally adjusted 1.408 million annual rate, the Commerce Department said Friday. Building permits also resumed falling. The government raised its original estimate for December starts. Construction rose by 5.0% to 1.643 million, revised from an originally reported 4.5% climb to 1.642 million.
Wall Street expected a much smaller decline in starts during January. The median estimate of 25 economists surveyed by Dow Jones Newswires was a 2.6% decline to a 1.600 million annual rate. The last time construction was lower was August 1997, when starts were at 1.390 million.
Housing has taken a toll on the economy, reducing the growth rate in the fourth quarter of last year by 1.16 percentage points to 3.5%. Sales of new homes tumbled in 2006, forcing builders faced with rising inventories to offer incentives in order to move property.
Some recent data, however, had indicated the slump might have hit a bottom. The latest government report on new-home sales, for example, showed a 4.8% increase in demand during December. Year over year, demand was 11.0% lower.
(Excerpt) Read more at online.wsj.com ...
Weather
ping
Now there's fewer construction jobs no excuse for letting the mexicans cross the border in waves.
4
Tough to start building homes in snowstorms
Snowstorms started in Feb, if im not mistaken.
Of course housing starts are down because inventory is bloated at the moment. All businesses have cycles. Sheesh.
I seem to recall folks not being able to get home for Christmas because of bad weather.
They may have slowed down but they're still building here in FL. We're surrounded by new construction. The damn trucks wake us up every morning along with the hammering. However there are many resales here of newer homes too. They are screwing the newer home owners with higher taxes while the older ones are paying about 1/3rd. Inspite of the taxes and current noise we still love it here.
West coast, midwest. East was way warmer than usual, but when its really warm in an expected cold climate, it doesn't effect housing starts much because the builders didn't plan on building, while if you expected it to be warm and instead there was a foot of snow on the ground you aren't going to build.
It's not an entirely accurate picture, but imagine the housing industry migrated south for the winter, and then the south was buried in snow.
Still, they should know if the snow was a major factor, so if we could just count on the NEWS media to report NEWS, not make it into political commentary, we could guess that the snow wasn't the cause.
Yes but there's still Lettuce to be picked, and Social Security checks to be mailed.
I just love these articles that forecast doom and gloom just because there was a pause in business DUE TO THE FREAKING COLD WEATHER.
"I just love these articles that forecast doom and gloom just because there was a pause in business DUE TO THE FREAKING COLD WEATHER."
Quick question: was it not cold last year? Or the year before? Comparing January to January should be apples to apples.
At the same time, housing sales are down in 40 states while prices continue to plunge in many cities. The spokesman for the National Association of Realtors is still claiming the worst of the housing bust is over. In reality, David Lereah must be pulling his hair out. His own house in a D.C. suburb has declined 11% in value That is since September, 2006. This statement was from the same guy who said in April, 2006 that "sales will move up." Oh, well. No big deal, people. People exaggerate and fib all the time to protect their careers.
That's nothing, I saw a post about houses declining 40% in value across the entire state of Florida. Oh wait, that was your post, about a few hurricane damaged houses. Nevermind.
Or not.
8.7% annual return (not counting leverage and usage of the home) probably pales in comparison to what ex-Owner would have recommended.
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