Housing Starts Down 17.6 Percent in March

[Career Prole]

WASHINGTON (Reuters) - Housing starts plunged 17.6 percent in March, marking their steepest drop in more than 14 years, as groundbreaking for both single-family and multi-family homes tumbled, a Commerce Department report showed on Tuesday.

March housing starts fell to a 1.837 million unit rate from an upwardly revised 2.229 million unit pace in February. The decline marked the largest monthly drop since January 1991, when starts also fell 17.6 percent.

Wall Street economists had expected housing starts to drop a far smaller 4.8 percent in March to a 2.09 million unit rate from the 2.195 million unit clip initially reported for February.

Single-family housing starts slid 14.4 percent to a 1.539 million unit pace, the largest drop since January 1991, when they fell 19.6 percent. Starts on structures with five or more units also tumbled, falling 31.6 percent and marking the biggest decline since a 38.3 percent drop in March 2000.

http://story.news.yahoo.com/news?tmpl=story&cid=568&ncid=749&e=6&u=/nm/20050419/bs_nm/economy_housing_dc

[tanyev]

1. Woo-hoo. This economy is smokin'.

[Pithy Cherub]

6. nah, those were the home dreams of first time buyers...

[hatrack]

2. The economy is strong and getting stronger

The economy is strong and getting stronger! The economy is strong and getting stronger!

There! Doesn't everybody feel better now?

[Warpy]

3. March generally sees an INCREASE

since the weather has improved enough in the northern states for foundations to be dug and concrete poured.

This is bad news, folks.

[Media_Lies_Daily]

4. That's a BIG drop! But it's the only way to keep new home prices....

...artificially inflated. When this tactic stops working, look out below!

[Beetwasher]

5. Well, That Can't Be Good

n/t

[Cambist]

7. Housing Starts Tumble

WASHINGTON (Reuters) - Housing starts plunged 17.6 percent in March, marking their steepest drop in more than 14 years, as groundbreaking for both single-family and multi-family homes tumbled, a Commerce Department report showed Tuesday.

March housing starts fell to a 1.837 million unit rate from an upwardly revised 2.229 million unit pace in February. The decline marked the largest monthly drop since January 1991, when starts also fell 17.6 percent.

Wall Street economists had expected housing starts to drop a far smaller 4.8 percent in March to a 2.09 million unit rate from the 2.195 million unit clip initially reported for February.

WASHINGTON (Reuters) - Housing starts plunged 17.6 percent in March, marking their steepest drop in more than 14 years, as groundbreaking for both single-family and multi-family homes tumbled, a Commerce Department report showed Tuesday.


http://money.cnn.com/2005/04/19/news/economy/housing.reut/index.htm?cnn=yes

[Beetwasher]

8. Well, That Can't Be Good

n/t

[bushisanidiot]

9. The effects of the bankruptcy bill are taking hold..

good move, repuke idiots!

AWOL Bush won't be satisfied until this country is completely destroyed.

[Psephos]

19. * is an idiot, but this has nothing to do with the Bankruptcy Bill n/t

[Trillo]

10. Are the price increases for construction materials responsible?

The article doesn't say why. So, Why? Has building houses become unprofitable?

[aneerkoinos]

12. It's a bubble

And what bubbles do is burst. Knowing when is the difficult part, this one has been long due. The house of cards (US economy) is now beginning to tremble, it will collapse, but when? That is the difficult question. It may happen before summer or later, but I will be very surprised if it hold out more than three years before the Perfect Storm hits.

[Trillo]

14. Yes, but this suggests more upward price pressure, not a "bubble burst".

My question had more to do with the underlying fundamental for the reason builders are building fewer new homes.

[aneerkoinos]

17. Why?

There has been upward price pressures for a long time (energy and other raw materials).

You are asking which stick finally broke the back of the camel. Whatever, but main point is that US consumers are reaching their debt limit and cannot afford to buy so many new homes, so demand has been going down, and now the supply side is seeing that and reacting.

[TreasonousBastard]

16. I'm just guessing, but...

I suspect it's a perfect storm of increased land prices, increased construction costs, restrictive zoning and environmental policies, increased difficulty of developers getting financing, and running out of people who can afford $400,000 "starter" homes.

[othermeans]

11. Housing has been the one thing that has been holding this tepid recovery

together. Markets were all down for the third straight day. I wonder how this news will affect them? Bush will have to stop worrying about social security and start worrying about a major recession.

[Yavin4]

13. Not Housing per se, But Historically Low Interest Rates

That's the thing that I keep saying over and over again. It's not just that Greenspan lowered rates. He lowered them to historically low levels, and people have rushed in to buy homes only to get too far in over their heads.

[theHandpuppet]

18. Good point!

I agree with your assessment. Whatever gave people the idea that living on an estate was the norm? I've seen acre upon acre of McMansions cropping up all over the place and can only wonder, are there really THAT many people who can afford this kind of housing? I'm obviously out of the cultural loop. To me, the "good life" doesn't include money for a huge manse with a couple of Lexus SUVs in the driveway and a quarter million RV to toodle down to the vacation cottage in Myrtle Beach.

Folks who are saddling themselves with this much debt are going to be in for a nasty surprise when this economy starts tumbling like a house of cards. That includes some Repuke members of my own family who spend like there's no tomorrow and chronically complain that they need more money to sustain their lifestyle. They look at me as if I'm from Mars when I say I really am not interested in living in one of their gated communities nor envy anyone with gold-plated bathroom fixtures.

Methinks it won't be long before there are a LOT of folks who get smacked in the face with a good dose of reality.

[Stuckinthebush]

20. On the plus side

Pretty soon there will be a lot of very affordable homes with gold-plated bathroom fixtures...

:evilgrin:

[d.l.Green]

15. What's so bad about a drop in new house building? I would think that

demand would catch up to this smaller number at a future date and hold housing values up. And it's good news for the environment. I live in an urban area with plenty of empty housing stock awaiting restoration- I always wonder what makes people buy these new plastic houses when they could have brick for much less. Guess no one's interested in long term investing anymore... :shrug:

[daleo]

21. Here's the key sentence, I think

"The decline marked the largest monthly drop since January 1991, when starts also fell 17.6 percent."

January 1991 reminds me of Bush 1, Recession 1.

[Nickster]

22. Exactly. That's the first thing I thought of as well.

[Zorra]

23. "their steepest drop in more than 14 years"

Before April, 1991. Let's see, that would be the during the Presidency of...why, George H.W. Bush! A republican!

Republicans, the borrow and spend party, who have the philososphy of take the money and run, put a band-aid on it, and let the Democrats fix it later, after we milk it for everything we can and the public finally gets wise to us.

What a surprise.