Have no worry, this should pick up by spring time.. hahahahahaha
ECONOMIC REPORT
Housing starts plunge 14.3% to 10-year low
Pace of building new homes down 37.8% on year-over-year basis
By Rex Nutting, MarketWatch
Last Update: 9:05 AM ET Feb 16, 2007
WASHINGTON (MarketWatch) -- U.S. home builders started the fewest homes in nearly a decade last month, as housing starts plunged 14.3% to a seasonally adjusted annual rate of 1.408 million, the Commerce Department reported Friday.
January's rate was the lowest for housing starts since August 1997. Starts were down 37.8% compared with January 2006.
Also, building permits dropped 2.8% to 1.568 million in January, 28.6% below the same month a year ago. Read the full government report.
The starts figure was much lower than expected on Wall Street, where economists were looking for a 2% drop to 1.60 million annualized units. The permits figure was close to the median forecast of 1.58 million expected in a MarketWatch survey of economists. See Economic Calendar.
The stunning drop in home construction indicates that builders are scaling back their plans on a massive scale, aiming to work down the excess inventory of unsold homes on the market.
On Thursday, the National Association of Home Builders reported that its survey of builder sentiment rose in February to the highest level since June. Builders were much more optimistic about sales in six months than in current conditions. See full story.
But hopes, such as those expressed by Federal Reserve Chairman Ben Bernanke this week, that a bottom in the housing market has been reached will have to be reconsidered in light of January's starts and permits data.
In a separate report Friday, the Labor Department said the producer price index fell 0.6% in January, with core prices excluding food and energy rising 0.2%. Both figures were exactly as expected.
Bonds rallied after the two reports, while the dollar fell. Stock futures ticked higher, then retreated. See Indications.
Crunching the numbers
Last month's single-family starts dropped 11.2% to a seasonally adjusted annual rate of 1.108 million homes, the lowest since August 1997, while permits for single-family homes fell 4% to 1.121 million, the lowest since December 1997.
Starts of multifamily units fell 24%, while permits for multifamily units rose 0.4%
Starts fell in three of the four regions as tracked by the Commerce Department in January, as the Northeast enjoyed warmer temperatures and drier-than-normal weather in the first half of the month. Starts rose by about 9% in the region.
Starts fell by 28% in the West, by 15% in the Midwest and by 12% in the South. Starts in the Midwest were at the lowest level since 1991. Starts in the West fell to the lowest level since 1996. It was the biggest drop in the West since 1979.
Completions of new homes fell 1.2% to a seasonally adjusted annual rate of 1.88 million, an indication that a significant amount of new supply's still hitting the market. It can take about six months for a home to go from groundbreaking to completion.
There were 1.2 million homes under construction in January, down 14% from the previous January.
Two weeks ago, the Commerce Department reported that the number of vacant homes increased by 34% in 2006 to 2.1 million at the end of the year, nearly double the long-term vacancy rate. Economists said there are 1 million excess homes.
The government's housing data are subject to large sampling and other statistical errors. It can take five months for a new trend in housing starts to emerge from the data.
In the past five months, housing starts have averaged 1.56 million on an annualized basis, down from 1.61 million in the five months running through December and 2.12 million for the period ended January 2006.
Starts in November and December were revised lower by a cumulative 22,000 annualized. End of Story
ECONOMIC REPORT
Housing starts plunge 14.3% to 10-year low
Pace of building new homes down 37.8% on year-over-year basis
By Rex Nutting, MarketWatch
Last Update: 9:05 AM ET Feb 16, 2007
WASHINGTON (MarketWatch) -- U.S. home builders started the fewest homes in nearly a decade last month, as housing starts plunged 14.3% to a seasonally adjusted annual rate of 1.408 million, the Commerce Department reported Friday.
January's rate was the lowest for housing starts since August 1997. Starts were down 37.8% compared with January 2006.
Also, building permits dropped 2.8% to 1.568 million in January, 28.6% below the same month a year ago. Read the full government report.
The starts figure was much lower than expected on Wall Street, where economists were looking for a 2% drop to 1.60 million annualized units. The permits figure was close to the median forecast of 1.58 million expected in a MarketWatch survey of economists. See Economic Calendar.
The stunning drop in home construction indicates that builders are scaling back their plans on a massive scale, aiming to work down the excess inventory of unsold homes on the market.
On Thursday, the National Association of Home Builders reported that its survey of builder sentiment rose in February to the highest level since June. Builders were much more optimistic about sales in six months than in current conditions. See full story.
But hopes, such as those expressed by Federal Reserve Chairman Ben Bernanke this week, that a bottom in the housing market has been reached will have to be reconsidered in light of January's starts and permits data.
In a separate report Friday, the Labor Department said the producer price index fell 0.6% in January, with core prices excluding food and energy rising 0.2%. Both figures were exactly as expected.
Bonds rallied after the two reports, while the dollar fell. Stock futures ticked higher, then retreated. See Indications.
Crunching the numbers
Last month's single-family starts dropped 11.2% to a seasonally adjusted annual rate of 1.108 million homes, the lowest since August 1997, while permits for single-family homes fell 4% to 1.121 million, the lowest since December 1997.
Starts of multifamily units fell 24%, while permits for multifamily units rose 0.4%
Starts fell in three of the four regions as tracked by the Commerce Department in January, as the Northeast enjoyed warmer temperatures and drier-than-normal weather in the first half of the month. Starts rose by about 9% in the region.
Starts fell by 28% in the West, by 15% in the Midwest and by 12% in the South. Starts in the Midwest were at the lowest level since 1991. Starts in the West fell to the lowest level since 1996. It was the biggest drop in the West since 1979.
Completions of new homes fell 1.2% to a seasonally adjusted annual rate of 1.88 million, an indication that a significant amount of new supply's still hitting the market. It can take about six months for a home to go from groundbreaking to completion.
There were 1.2 million homes under construction in January, down 14% from the previous January.
Two weeks ago, the Commerce Department reported that the number of vacant homes increased by 34% in 2006 to 2.1 million at the end of the year, nearly double the long-term vacancy rate. Economists said there are 1 million excess homes.
The government's housing data are subject to large sampling and other statistical errors. It can take five months for a new trend in housing starts to emerge from the data.
In the past five months, housing starts have averaged 1.56 million on an annualized basis, down from 1.61 million in the five months running through December and 2.12 million for the period ended January 2006.
Starts in November and December were revised lower by a cumulative 22,000 annualized. End of Story
