Housing Starts Drop Sharply

Most recent housing market report comes in weaker than expected.


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.