Housing started plunged 22.5% in February, sliding to the second-lowest on records dating back more than a half-century. The decline is the latest evidence that the housing industry is years away from a recovery.
The latest reports on home sales and prices offer a complicated and conflicted picture. But when the data are taken together, one thing is clear: Weighing risk and reward, it's worth waiting a few months to see which way the real estate winds are really blowing.
Want to see how the construction industry will do in 2011? Look at how architects did in 2010. By that gauge, last year's thin uptick in building design and engineering services foretells a similar small gain ahead for builders -- after two years of steep declines.
While home prices were falling last fall nearly nationwide, the pace of sales has picked up more recently. Overall, it seems clear that the worst of the housing debacle has passed. It's just that the U.S. remains on a slow, grinding track back to housing health.
With corporate earnings season in full swing -- watch for McDonalds, along with Catepillar, Amazon and other -- and with the Fed meeting on interest rates, the GDP estimate and housing numbers coming out -- the week ahead is expected to be quite busy.
U.S. mortgage rates have grown for five straight weeks, in the last week hitting their highest levels in seven months. Ten-year Treasury note yields have been climbing on inflation concerns, driving the higher rates.
The humbled housing sector took a modest step forward last month as starts rose a better-than-predicted 3.9% to a 530,000-unit annual rate. Still, at the current pace, the nation is 18 to 24 months from seeing normal levels of homebuilding.
Traders face plenty of economic news this week, and considering how much the market has risen, it could be time for a bit of a pullback. But at least one trader thinks that's just what's needed to create a base for further gains ahead. [Video]
When it comes to predicting the U.S. economy, who has the best crystal ball? Lou Crandall, chief economist at economic advisory firm Wrightson ICAP, according to Bloomberg Markets magazine's new list of top analysts released Thursday.
U.S. housing starts unexpectedly plunged 11.7% in October to a 519,000-unit annual rate, weighed down by a 47.5% decline in apartment and condo construction. But building permits, a leading indicator of future housing construction, did inch 0.5% higher last month.
The unexpected increase of 0.3% to a 610,000 annual rate provides additional evidence that homebuilding may be bottoming. However, economists caution that it's still too early to declare any kind of solid turnaround.
Boosted by government projects, construction spending unexpectedly rose 0.4% in August. Though a single monthly gain hardly means the sector%u2019s long contraction is over, the data does hint that the period of large, monthly construction spending declines may be ending.
Housing starts rose 10.5% in August to a seasonally adjusted annual rate of 598,000, providing hope that the sector is stabilizing. However, experts caution that monthly data have a large margin of error.
