Housing Starts Show Hint of Stabilization

Single-family housing starts tumbled 6.7% in February after the government revised January starts upward by 15,000 units, which could be a sign that construction activity may be close to stabilizing in the next few months. The U.S. Census Bureau reported that single-family housing starts declined from a seasonally adjusted annual rate of 758,000 in January to 707,000 in February, which is down 40.5% since February 2007. Many economists are predicting that housing starts and home sales could bottom out this summer. "Sales and home construction can fall only so far," said Scott Anderson, a senior economist at Wells Fargo & Co. Meanwhile, many builders are struggling financially. Bank data shows that 4.25% of single-family construction and development loans were 90 or more days overdue in the fourth quarter, nearly double the third quarter rate.