Housing Starts Take Another Hit

Single-family housing starts took in on the chin again in August, falling 6% from the level recorded in July and 20% from that of a year earlier, according to government figures.It was the weakest reading since April 2003. Single-family starts totaled 1.36 million units on an annualized basis, and multifamily starts totaled 265,000 units. Multifamily activity grew 8.2% from July's level, but fell 16.9% compared with that of August 2005. The poor numbers prompted Merrill Lynch to issue a report entitled "House of Horrors." Merrill quoted news reports that some builders are offering to "make payments on the old mortgage (and the new one) just to close the deal." Merrill added: "It's the New Deflation -- and it spans a $22 trillion market otherwise called residential real estate." The housing figures are compiled by the Commerce Department, and the Department of Housing and Urban Development.