Housing Starts Drop Sharply

Most recent housing market report comes in weaker than expected.

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The government on Friday released its new home construction figures for September, which showed that the sector weakened even more than expected.

From the report:

Privately-owned housing starts in September were at a seasonally adjusted annual rate of 817,000. This is 6.3 percent (±12.0%)* below the revised August estimate of 872,000 and is 31.1 percent (±8.3%) below the revised September 2007 rate of 1,185,000.

Single-family housing starts in September were at a rate of 544,000; this is 12.0 percent (±8.3%) below the August figure of 618,000.

The good news?
Single-family starts have dropped "hopefully to a level that will prove low enough to begin reducing the overhang of excess inventory," Goldman Sachs economists said in a report.

The bad news?
"In the meantime, [the report is] just one more sign that the economy ended Q3 on an extremely weak note," they added.