Posted on 10/17/2007 6:56:43 AM PDT by shrinkermd
WASHINGTON (Reuters) - U.S. home construction starts fell in September to their lowest level in more than 14 years, while consumer prices rose at the sharpest rate in four months, separate reports showed on Wednesday.
Weak housing data boosted U.S. government bond prices and the U.S. dollar slipped versus euro and yen as some investors saw the data as a sign of continuing headwinds for the economy.
U.S. stocks were still expected to open higher with investors more focused on healthy corporate profit reports.
"We knew housing was weak, but these numbers show another pretty big drop, so the sector remains soft overall," said Shaun Osborne, senior currency strategist at TS Securities in Toronto.
U.S. home construction starts fell 10.2 percent in September, while building permit activity, a sign of future construction plans, also dropped to the lowest level since mid-1993, a government report on Wednesday showed.
The Commerce Department said housing starts set an annual pace of 1.191 million units in September, lower than the 1.285 million units expected by economists. It was the lowest pace for housing starts since the March 1993 rate of 1.083 million units.
"There is no end in sight," said Kurt Karl, chief U.S. economist with Swiss Re in New York. "The builders didn't realize how many cancellations they are going to face. If we hit 1.0 million start range, it's consistent with recessions in the past. And we are heading in that direction."
(Excerpt) Read more at nytimes.com ...
The lemmings at Reuters seem to be amazed that so many homebuilders have made the decision to cut back on new construction in response to high inventory levels.
This leads one to the question: Does anyone at Reuters understand what the phrase “rational decision” means?
Let the over builder eat cake.
Good point. Still, this is more proof that the mortgage crisis is becoming a real problem.
It seems that one of the reasons the bad news from the housing market has not impacted the economy in a more direct fashion results from the large numer of illegals involved in construction. Their numbers do not show in the growth of unemployed; however, it is too bad that the NYTimes has not tried to obtain data on the number of vehicles returning to Mexico through border crossings. Border Patrol people report the number is up significantly.
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Energy independence should be one of our nation’s top priorities.
Home starts at record lows should be expected, given home ownership is at an all time high.
Duh.
These so called ‘experts’...aren’t.
Could it be that perhaps the builders “overbuilt” and there are simply not enough people looking for a home to fill the existing supply?
Great minds and all that. I think we were posting the same thought at the same time.
Its pretty obvious to anyone thats been paying attention to this stuff for the past few decades.
Eventually, you ‘tap out’ the available market, no matter if its homes or panty hose.
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