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Housing Starts Sink 10% – Unexpectedly

From CNN’s Money.Com:

New home construction sinks 10%

By Julianne Pepitone, staff reporter

June 16, 2010

NEW YORK (CNNMoney.com) — The government reported Wednesday that new home construction fell sharply in May — the first month after a homebuyer tax credit expired.

Housing starts fell 10% from April to a seasonally-adjusted annual rate of 593,000 last month, the Commerce Department said.

Economists were expecting housing starts to fall to only 655,000. On a year-over-year basis, starts rose 7.8% from May 2009.

What a surprise. The Obama economists were overly optimistic yet again.

New construction of single-family homes, the key sector of the housing market, plummeted 17.2% over the month to an annual rate of 468,000.

The annual rate for new construction of multi-family homes — buildings with 5 or more units — was 112,000.

April was the last month in which first-time home buyers could qualify for a federal tax credit of up to $8,000. Earlier this year lawmakers extended the deadline through April 30 and added a new credit of up to $6,500 for some existing home owners who move…

Last week, a Senate amendment was unveiled that proposes extending the tax credit deadline to Sept. 30.

Proving once again that tax cuts (and credits) work every time they are tried.

This article was posted by Steve on Wednesday, June 16th, 2010. Comments are currently closed.

8 Responses to “Housing Starts Sink 10% – Unexpectedly”

  1. untrainable says:

    Overly optimistic? They are not optimistic, they’re delusional. When have these skippys ever been right? When have they ever been close? When have they ever… ever… NOT been surprised?

    Geeez… Even a blind squirrel can find his nuts.

  2. proreason says:

    These stats are nearly useless, designed to let the government claim anything they want, and still the picture is bleak. “Annual rate”, “seasonally adjusted”, “vs prior year”. Bullshit. Shell game.

    Look at this chart instead: http://www.data360.org/graph_group.aspx?Graph_Group_Id=26

    Now you see the truth. For 47 years from 1959 to 2006, housing starts averaged over1.5 million a year. They were highly volatile, with the worst fall from peak being 61%.

    Now we’ve been at 1/2 million a year (the lowest in 52 years, probably the worst in 65 years), and the fall from peak is 78%. Moreover, it’s not clear whether the worst is over, because the recovery is still weak. No wonder so many construction jobs have disappeared.

    This despite signinificant government intervention. It does appear, however, that the worst of it was on Bush’s watch, starting in early 2006. I don’t recall hearing that there was a once-in-2-generations event in housing going on, do you? It certainly wasn’t publicized in a major way.

    And btw, it appears that building houses and apartments with the stimulus money might have done some good:

    – it would have saved a lot of builders
    – it could have created a lot of good, low-cost housing.
    – that, if anything, would have been shovel-ready.

    So, of course, we couldn’t have done that……home construction isn’t unionized.

  3. pamypo says:

    I expected this and more.

  4. Mithrandir says:

    1. That $8000 tax credit is YOUR MONEY anyway!Wow, this slot machine is paying out everyone! Ching ching ching! NO! That money was stolen from you to begin with, but it was $30,000, after the government filter of endless secretaries and officials, it poops out a paltry $8000 for you~ wow, thank you Uncle Sam!

    2. $8000 is NOTHING! Ask a homeowner how far 8 grand will get you living in a liberal tax district? Not very far, THEN you are on the hook for 1000s of $ for as long as you can tolerate, and afford, to live in the area.

    3. This is another quasi-apology to George Bush, “Golly, all this stuff is so unexpected, we thought we had it all mapped out on the campaign trail—oops! The job is tougher than ‘expected.'”

    ~Why did people risk certain death on the high seas to again risk life and limb as a pilgrim or immigrant in the “new land” of America? To escape GOVERNMENT! Anything is worth the risk.

  5. JohnnyT says:

    I have been trying for over a year to modify my mortgage through Bof A fka Countrywide. Through the endless circles of red tape and bs you know what they told me? I am “under review”, for about 6 months now! They tell me when the underwriter oks me I will be good to go. Guess who the underwriter is? Fanny Mae!! ~~so we( the taxpayers) bail out the banks with taxpayer money and the Government bails out Fanny Mae, who then “decides” which citizen they will help, I believe they are dragging their feet so when the proper # of forecloseures in my area is below their threshold they will then foreclose on me too. They tell me to keep making that trial payment…

  6. platypus says:

    Bypass the banks, if you can. All it takes is a fat trust fund that wants to invest in you. It ain’t easy but the money is out there – it’s the banks that aren’t lending. Doesn’t mean nobody else is.

    Just remeber, if your credit rating has dropped but you haven’t changed – well then you are just as dependable as you ever were. Sell yourself instead of letting the system run you through a matrix which favors the system at your expense, only to tell you at the end that you aren’t sale-able.

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