Housing Continues Long Slide with Sharp Drop

Daily Forex Fundamentals | Written by Wachovia Corporation | Dec 16 08 14:41 GMT |

Housing starts fell to just a 625K unit pace, another new all-time low, as builders continued to cut back in the face of tighter credit and a weaker economy. Building permits continued to fall as well, down more than 100K units to just a 616K annual pace. We are getting closer to an eventual bottom, but activity could slide through winter. Starts & Permits Fell Sharply Starts dropped an astonishing 18.9 percent on the month, the largest drop in more than two decades. Builders continue to reign in new activity as the recession deepens. Permits fell 15.6 percent, the nineteenth drop in two years, foretelling weakness should continue for at least several more months. It will be a long cold winter for builders. Single & Multi Family Declined Single- and multi-family activity both saw sharp declines with starts falling 16.9 and 23.3 percent, respectively. Permits saw similar slides across the board. New home completions are still running north of a 1 million unit pace. As lower starts feed into lower completions and eventually inventories, it sets the stage for an eventual recovery. Wachovia Corporation http://www.wachovia.com Disclaimer: The information and opinions herein are for general information use only. Wachovia Corporation and its affiliates, including Wachovia Bank, N.A., do not guarantee their accuracy or completeness, nor does Wachovia Corporation or any of its affiliates, including Wachovia Bank, N.A., assume any liability for any loss that may result from the reliance by any person upon any such information or opinions. Such information and opinions are subject to change without notice, are for general information only and are not intended as an offer or solicitation with respect to the purchase or sales of any security or any foreign exchange transaction, or as personalized investment advice. Securities and foreign exchange transactions are not FDIC-insured, are not bank-guaranteed, and may lose value.