Housing Starts in U.S. Fell in July as Construction Stagnated

[marmar]

(Bloomberg) Builders began work on fewer homes in July, indicating residential real estate is failing to contribute to U.S. growth two years into an economic recovery.

Housing starts fell 1.5 percent to a 604,000 annual rate, in line with the median forecast of economists surveyed by Bloomberg News, from June’s 613,000 pace that was less than previously estimated, Commerce Department figures showed today in Washington. Building permits, a proxy for future construction, also dropped.

Falling sales, foreclosures and a lack of jobs may keep delaying a rebound in homebuilding, depriving the world’s largest economy of a source of strength seen in the early stages of past recoveries. Concern over housing is prompting banks to maintain strict mortgage lending rules and was one reason the Federal Reserve said it would hold borrowing costs at a record low until at least mid-2013.

“The housing market is still very depressed,” said Patrick Newport, an economist at IHS Global Insight in Lexington, Massachusetts. “Demand for new homes is extremely weak and the foreclosure pipeline is still high. It’s because of the weak economy, weak job growth and falling home prices.” ...............(more)

The complete piece is at: http://www.bloomberg.com/news/2011-08-16/housing-starts-in-u-s-fell-in-july-as-construction-stagnated.html

[ixion]

1. "very depressed" is putting it mildly...

the housing market is going to take years to sort out, it's so screwed up.

[Fumesucker]

2. Two years into an economic recovery?

Perhaps for Wall Street, Main Street not so much.

[BR_Parkway]

3. With all these foreclosures out there at 30-60% off peak prices, I can't imagine

someone springing for a new house these days.