The U.S. housing slump appears to be deepening based on a government report released Nov. 17. Housing starts plunged 14.6% in October to a 1.486-million-unit annual pace,well below economists’ median forecast of a 1.70-million-unit pace. Starts have now fallen in seven of the last nine months, and are currently at the lowest level since July, 2000, BusinessWeek.com reports.
The massive drop in October bucked the trend of improvement in other housing sector indicators since the big June-August downside correction and has left the market still focused on downside housing market risk.
Weakness was widespread, and again permeated another key piece of the monthly report,permits for new-home construction,leaving a sour outlook for the November and December reports as well. The 6.3% drop in permits to a 1.535-million-unit annual pace should continue to weigh on starts. Permits have now dropped for eight straight months, and are currently at the lowest level since December, 1997.
