Housing Starts Decline

Single-family housing starts fell 3.7% in October, but construction activity remained slightly above the 1.7 million mark for the sixth consecutive month.The U.S. Census Bureau reported that single-family starts declined from a seasonally adjusted annual rate of 1.77 million in September to 1.70 million in October, but the October starts were 2.3% above the level recorded a year earlier. Single-family starts were flat in the South, where the Gulf Coast states were battered by hurricanes in September and October. Meanwhile, homebuilders registered a sharp decline in future sales expectations in a National Association of Home Builders/Wells Fargo survey. The survey index of sales expectations for the next six months dropped 9 points to 64. Any reading above 50 indicates that more builders view sales conditions as good than poor. NAHB chief economist David Seiders said the sharp decline in the index "probably overstates the actual degree of deterioration in the single-family market." He said he expects the market to cool, with slightly lower sales and production next year. "We' re looking for a 5% or 6% decline in home sales next year," Mr. Seiders said.