U.S. housing starts drop 5% to 8-month low

Ground-breaking on new housing units fell sharply after a federal tax credit for buyers expired, putting the housing sector back in the dumps where it was a year ago, according to Commerce Department data released Tuesday.

After a 15% drop in May, housing starts fell another 5% in June to a seasonally adjusted annual rate of 549,000, the lowest level in eight months, the Commerce Department estimated.

"Despite record-low mortgage rates, housing is at risk of a double dip [recession] unless job growth strengthens soon," wrote Sal Guatieri, a senior economist for BMO Capital Markets.

The decline was larger than the 3% decline to 575,000 starts that economists surveyed by MarketWatch had expected. The government's estimate of starts for May was revised to 578,000, down from the 593,000 originally reported.

Read Full Article from MarketWatch

- Posted: 2010-07-20 13:54:46

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