Housing Starts Fall Again

Single-family housing starts fell 1% in May and were down 41% from the level recorded a year earlier, as the outlook for home sales continues to deteriorate. The U.S. Census Bureau reported that single-family housing starts declined from a seasonally adjusted annual rate of 681,000 in April to 674,000 in May. Builders are not seeing an improvement in the housing market, according to the latest National Association of Home Builders/Wells Fargo housing market survey. NAHB chief economist David Seiders says he does not expect housing starts to hit bottom until early next year. But his forecast has called for home sales to bottom out soon. "I may be compelled to kick that out a bit further," he told reporters. Mr. Seiders noted that mortgage rates have gone up as a result of the Federal Reserve's attempt to beat down inflation expectations. But the chief economist said he does not expect the Fed to tighten monetary policy this year. "I think we are going to be seeing further economic weakness," Mr. Seiders said. "I am hoping this recent surge on long rates will be easing back down within the next few weeks." If not, it could be a "big problem," he added.