View Full Version : May Housing Starts Tumble.

06-16-2010, 09:18 AM

US housing starts tumble in May

By Alan Rappeport in New York

Published: June 16 2010 14:31 | Last updated: June 16 2010 14:31

New home construction in the US collapsed in May, as building activity stalled after the government withdrew measures to prop up the housing market.

Housing starts fell by 10 per cent to an annual rate of 574,000 last month, the commerce department said on Wednesday. The figures were far worse than the 3.7 per cent decline economists had predicted and highlighted the market’s reliance on government support.

Homebuilders’ shares fell in pre-market trading after the data was released.

“The end of the tax credits has generally depressed housing data and tended to add a degree of caution to the market,” said Alan Ruskin, strategist at RBS Securities.

Since May 2009, home construction has climbed by 7.8 per cent as the market rebounded due to falling construction costs and the first-time homebuyer tax credit, which spurred new building. However, last month’s total was the lowest this year.

Analysts had been optimistic about renewed homebuilding activity, although some worried that a greater supply of new homes would put downward pressure on prices. Tight credit and a glut of foreclosed properties languishing on the market have been a drag on the sector in the absence of stimulus measures.

“We’re lacking a catalyst for a robust recovery, especially when you consider the lacklustre state of the US labour market ,” Mike Larson, a real estate analyst at Weiss Research, said ahead of the report. “So don’t look for the housing or construction industries to hit the ball out of the park any time soon.”

Building permits were also weak last month, signalling that future construction could continue to be slow. Permits fell unexpectedly, declining 5.9 per cent, to 610,000. Year-on-year permits were up by 4.4 per cent.

The drop in housing starts was concentrated among single-family homes, where construction plunged 17.2 per cent compared with April. Regionally, the south and the north-east recorded the biggest declines, while homebuilding picked up in the midwest and west.

Homebuilders have also started feeling more pressure, as evidenced by the National Association of Homebuilders’ survey that showed builder confidence falling in June to the lowest level since the start of the year.

Meanwhile, the US producer price index fell by 0.3 per cent from April to May, with prices pushed lower by a 1.5 per cent decline in the cost of energy. Core prices, which exclude food and energy, ticked up a mild 0.2 per cent.

Wholesale prices have climbed by 5.3 per cent since May 2009, but the modest increases confirm the Federal Reserve argument that inflation remains “subdued” and supports its policy of keeping interest rates “near zero” for the time being.

06-16-2010, 10:44 AM
I blame Bush.


06-16-2010, 11:41 AM

06-16-2010, 06:01 PM
finally ....something we can agree on !!!