The Commerce Department announces that new home starts dropped 14.6 percent in October to a seasonally adjusted annual rate of 1.486 million. This is the lowest it’s been since July of 2000. The issuance of building permits also fell 6.3 percent to a seasonably adjusted annual rate of 1.535 million. This is the lowest it’s been in nine years.
According to Rex Nutting with MarketWatch, “Housing starts are now down 27.4 percent from Oct. 2005 levels, and building permits are down 28 percent on a year-on-year basis. So in 2006, starts are down 11.1 percent compared with the first 10 months of 2005.”
Last month’s decline was greater than expected by Wall Street economists. The earlier forecast was for a drop of 4.5 percent in starts to 1.69 million with a marginal decline in permits, which was expected to be 1.62 million.
“Moreover, September’s starts data were revised lower, to 1.74 million from 1.77 million. Permits were revised higher, however, to 1.638 million from 1.620 million,” says Nutting. “The pullback in building was widespread.”
