US Data Preview: Housing Starts Expected to Dip
First Published Wednesday, 17th November 2010 02:56 am - © 2010 MNI News
MNI News is a leading provider of global FX and Fixed Income intelligence. Learn more
By Kasra Kangarloo
WASHINGTON (MNI) - Wednesday's report by the Commerce Department is expected to show another dip in U.S. housing starts, evidence of the continued stagnation in the housing sector.
According to a survey of economists by Market News International, housing starts are expected to drop from an annual pace of 610,000 to 590,000.
Kim Rupert, economist at Action Economics, said in a telephone interview that her expectations are for "a leveling-off at this point," given the severity of the drop-off in sales following the expiration of the homebuyer's tax credit.
Meanwhile, elsewhere in the housing sector, existing home sales have recently shown some modest improvement since the May expiration of the homebuyer tax credit which had the delayed impact of eating into future home sales and climbed to an annual sales pace of 4.53 million in September.
Initially, existing home sales were shielded from the expiration of the tax credit because sales are counted only after the completion of the contract, which allowed for the inclusion of sales from previous months.
The figure for new home sales, by contrast, showed an immediate fall after the expiration because sales are counted when contracts are signed. New home sales have also ticked up slightly since the initial drop-off, posting an annual pace of 307,000 homes sold in September.
According to Lawrence Yun, chief economist at the National Association of Realtors, during the September existing-home sales release, "the overall direction [of the housing market] should be a gradual rising trend in home sales with buyers responding to historically low mortgage interest rates and very favorable affordability conditions."
According to Freddie Mac's November 11th weekly mortgage survey, 30-year fixed mortgage rates averaged 4.17% nationally, and 15-year mortgages averaged 3.57%. The average 30-year rate was 4.91% the same week one year ago, and the 15-year rate was 4.36%.
The National Association of Home Builders index, which surveys home builder confidence, rose one point in September in Tuesday's report.
-- Kasra Kangarloo is a reporter for Need to Know News
** Market News International Washington Bureau: 202-371-2121 **