In a blow to the optimism that had surrounded the U.S. housing sector in recent months, housing starts fell a sharp 10.6% in October, the Commerce Department reported Wednesday.As you know, I don't put much stock in month-over-month changes. However, I suspect October's decline was tax credit related. Since it was uncertain in October whether the homeowner tax credit would get renewed, this may give us an idea of what to expect when the tax credit finally goes away next year (hopefully).
New construction on housing units dropped to a seasonally adjusted annual rate of 529,000, the lowest level since April. The 10.6% drop was the biggest percentage decline for starts since January.
Both single-family homes and multifamily units declined last month.
Prior to the October decline, housing starts have been flat for four straight months, on the heels of a big rebound earlier in the year from historic lows for the home-building industry.
Thursday, November 19, 2009
Housing starts fell significantly in October
Month-over-month housing starts fell in October: