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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Reader Comments (Page 1 of 1)
11-18-2009 @ 6:44PM
william lindblad said...
Good question but are we talking about "new" or "existing" or a combination?
New construction will be contingent upon the finalized version of the energy bill and existing will be at the mercy of the general economy. That is a general statement.
What I read of the construction method details for new homes in the proposed legislation tells me that, if anything, it will cause further escalation of initial cost. The only way around this will be that builders reduce square footage resulting in more modest, but more efficient homes. Consequently, the existing market will look to be a better value as size usually follows location as a priority.
If the status quo remains there is a possibility that the existing market will show some strength by the 2nd quarter of 2010. However, there are a lot of obstacles in this path.
One being the commercial real estate market. This just seems to hang on and on and yet there are many that believe that a shock is coming.