US housing market circling the drain

[marmar]

U.S. Builders Began Work on Fewer Homes Than Forecast (Update2)

By Bob Willis

Sept. 17 (Bloomberg) -- Builders in the U.S. broke ground on fewer houses than forecast in August, signaling the worst housing recession in a generation will continue to weigh on growth in coming months.

Housing starts fell 6.2 percent in August to an annual rate of 895,000, the fewest since January 1991, the Commerce Department said in Washington. Building permits, a sign of future construction, dropped 8.9 percent to an 854,000 pace.

Builders are scaling back as stricter lending and record foreclosures swell the number of properties on the market. The housing and credit meltdowns that led to the collapse of Lehman Brothers Holdings Inc. may continue to subtract from economic growth for the rest of the year and into next.

``The home-construction industry is still in a deep recession and will remain there probably for the rest of the year,'' said Patrick Newport, an economist at Global Insight Inc. in Lexington, Massachusetts, who forecast a decline to 893,000. ``There are just too many houses on the market.''

Treasuries were little changed after the report, with 10- year notes yielding 3.41 percent at 9:07 a.m. in New York.

Starts were projected to fall to a 950,000 annual pace from a previously estimated 965,000 million in July, according to the median forecast of 74 economists polled by Bloomberg News. Estimates ranged from 893,000 to 1.04 million. ......(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601087&sid=a0MKYUY_BhxM&refer=home

[Extend a Hand]

1. commercial real estate market to follow shortly.

[glinda]

2. MN Construction and Housing Market

In the latest report, MN. was ranked fairly high is the housing crisis. WELL....I don't think they figured in the fact that the few years prior to this, "they" overbuilt. Speculators were buying up land, sometimes nicely wooded land, clearing it totally and building tons of homes on it. Sometimes way out from Cities in the middle of corn fields. They "overbuilt" and now we are in this mess because they couldn't move all the crap they built. I think far more fault lies with the builders, speculators, investors and yes with the Banks that loaned money out for these overbuilt land raping projects. They expected exactly what to happen with the older and other homes that people were trying to sell??????? You could buy a new pristine home for the same price as a pre-owned home. I think that these investors should pay the piper.

[renate]

3. I honestly am surprised there are any housing starts at all

There are preexisting homes on the market for dirt cheap... why would so many people be building new ones?

I can see a few here and there--dream homes built by people whom the economy has spared, and so on--but nearly a million a year?

That's good news for people working in the construction industry, though. I'm glad they aren't totally screwn.