The Commerce Department announced Wednesday housing starts for September dropped 10.2% to a seasonally adjusted rate of 1.19 million, slumping to the lowest level in 14 years. The drop was worse than the 1.28 million economists had expected. Authorized building permits dropped 7.3% last month to an annual rate of 1.23 million, also the lowest in 14 years. Housing starts have fallen 30.8% over the last year. Also, noteworthy was the decrease in apartment building starts, which dropped 34.3%. The housing market has had an excess accumulation of homes due in part to the recent credit-market crisis, and now rising foreclosures are pushing even more homes onto the market. Fed Chairman Bernanke noted Monday the bleak housing market was a key factor in lowering interest rates aggressively last month (full story). Still, there seems to be little chance of a bottom soon: the latest forecast from the Mortgage Bankers Association predicts originations decreasing 18% in 2008 and another 6% in 2009.
Commentary: Foreclosures Double Nationally; Countrywide Mortgage Fundings Drop 44% • Another Housing Bubble to Short
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