Housing starts in the United States declined more than forecast in February, the slowest pace since April 2009, building permits dropped to record low, signs the housing market recovery is limping along like the rest of the economy improves.
Start of construction of the fell at an annual rate of 479,000 22.5%, with declines in all regions, trading figures showed today in Washington. The decline in January was the largest since March 1984. The median survey forecast Bloomberg News called rate of 566,000. Building permits, a proxy for future construction, fell 8.2 percent at 517,000.
Foreclosures driven down prices, add to inventories, together with limited job growth, are restraining new construction. The Federal Reserve policymakers said yesterday the housing market "continues to be depressed," as they have plans to acquire securities of finance to boost economic growth.
"At this point new homes are expected to continue to fall into existing homes that distressed assets constitute a good deal for the buyers," said Milan Mulraine, senior strategist at TD Securities in New York. "We do not see a strong rebound in sight, permit approval is just marginally above begins."
Stock index futures erased gains after standard contracts report. & poor 500 index expiring in June fell less than 0.1 percent to 1, 274.8 8: 33 am in the morning in New York. The best preserved of the slightly modified with the yield on the benchmark 10-year note at 3.30 percent.
Producer prices
Wholesale costs rose more than forecast in the United States in February, led by the biggest gain in food since 1974 's the rise of energy prices, Labor Department figures showed today. Producer-index climbed 1.6 percent, the most since June 2009. Core producer prices, which exclude food and fuel, rose 0.2 percent, less than half the 0.5 percent gain in January.
Housing starts estimates ranged from 537,000 to Bloomberg News survey of economists 638,000 74. The January rate was revised from 618,000 previous estimate to a 596,000. Permits declined by 28 percent in the northeast to the lowest on record and 14 percent of the all-time low in the West. Construction of houses that declined 12 percent rate of 375,000 in February, the slowest since March 2009, the previous month. Work on multifamily buildings, such as houses and apartments and townhouses plummeted 46 percent compound annual rate of 104,000.
By region
Starts in all four regions, fell by 49 percent drop in the Midwest record low. Starts fell 38 percent in the Northeast, 28 percent in the West and 6.3 percent in the South. Fed Chairman Ben s. Bernanke's said during testimony to Congress this month "remains weak" housing sector even with "some grounds for optimism" in the economy. "Many potential home buyers find mortgages more difficult to obtain, home prices are concerned," Bernanke told lawmakers March 2 does.