November 17, 2022 | 09:17
U.S. Housing Starts Slide
U.S. housing starts fell 4.2% to 1.425 mln a.r. October. That comes after a revised 1.3% drop a month earlier, better than the 8.1% decline initially reported. Construction of single-family homes plunged 6.1% to the lowest level since May 2020, while volatilemulti-units declined 1.2%. Starts fell in most regions though the densely populated South managed to climb 6.7%.
Meantime, building permits fell 2.4% to 1.526 mln a.r., amid dwindling confidence in the housing market. A report on Wednesday showed home builder sentiment now at the lowest level in more than 10 years. Looking ahead, weaker construction is likely amid prices that are still elevated, a cloudy economic outlook and mortgage rates that have topped 7%.
Despite soaring interest rates and shrinking wealth, U.S. households continue to be supported up by a robust job market. A separate report showed initial claims edged down 4k to 222k in the November 12 week, remaining near historical lows.
Bottom Line: U.S. housing starts fell more than expected in October though the prior month was revised up. Home builders continue to face a raft of headwinds including still-hot inflation, worker shortages, slowing economic growth and fading housing demand. Looking ahead, the extremely interest-sensitive housing market will weaken further