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Home Construction, Builder Confidence Tumble

Housing starts fell 6.3 percent in September to a seasonally adjusted annual rate of 817,000 units, down from 872,000 units in August, the U.S. Commerce Department reported today. This is 31.1 percent below the 1.185 million units estimated in September 2007 and is the lowest in 17 years.

Permits for new construction were at a seasonally adjusted annual rate of 786,000, down 8.3 percent from the revised August rate of 857,000 and 38.4 percent below the September 2007 estimate of 1.277 million units.

Builder confidence sank to a new record low this month after edging up slightly last month, according to the latest NAHB/Wells Fargo Housing Market Index (HMI). NAHB chief economist David Seiders attributes the drop in builder confidence to uncertainty in the financial markets and other economic factors. “Undoubtedly, today’s HMI reflects builder assessments of the recent events on Wall Street, the rapid deterioration in job markets and the corresponding weakness in consumer confidence. This report provides clear evidence that an additional economic stimulus package is needed, including a substantial incentive to spur home buying,” Seiders says.

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