Housing starts suggest continued sluggish economy
Housing starts fall in April, suggesting fewer homes will be built in 2011 than expected.
April housing starts, which gauge new home construction, fell 10.6 percent from March, and this is in spite of an upward revision to March data, according to a Wall Street Journal blog.
Recent Commerce Department numbers show that home construction fell again in April, indicating that housing may weigh down the economy for some time.
In March of this year, builders were building at a seasonally adjusted rate of 585,000 homes annually. Most economists had predicted that housing starts would rise. Permits for new homes also fell, by 4 percent, indicating that we’ll see fewer starts in months to come.
Housing starts dropped 23.9 percent in April compared with 2010 figures. The starts suggest only 523,000 new houses will be built in 2011. At the height of the housing boom, nearly 1.5 million new homes were being built each year – a figure that far outnumbered the demand, said Steve Blitz, senior economist at ITG Investment Research, in an interview with NPR.