U.S. housing starts fall sharply in October as inflation rises

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The U.S. housing market continued to show weakness in the latest reading. Here are the Commerce Department's latest numbers:

  • Housing starts dropped 10.5% to 529,000 units. The expected number was 600,000.
  • Groundbreaking for single family homes fell 6.8% last month to an annual rate of 476,000 units.
  • Starts for multifamily homes fell sharply to a 53,000 annual pace, a drop of 34.6%.
  • Compared to October last year, housing starts fell 30.7%.
  • New building permits for future construction fell 4% to 552,000 units. Analysts had predicted 580,000 units.
  • Compared to the same period of last year, building permits fell 24.3%.
  • The number of houses under construction fell to a record low of 560,000 units.
  • The number of authorized permits also fell to an all-time low of 93,900 units.

In a separate report, the Commerce Department reported that the Consumer Price Index rose 0.3%. The markets had been expecting 0.2%. The core inflation rate was 0.2%, the same as the previous month. Used car and truck prices accounted for most of the increase.

The housing report indicates that we are not digging ourselves out, but rather digging the hole deeper. Until housing picks up, look for continued sluggishness in the overall economy.

Do you believe that housing will pick up next year?

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Last updated: February 09, 2010: 06:21 PM

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