How could anyone have expected new home building to be anything more than anemic with housing prices expected to fall nationwide in 2011? Did some forecasters miss the fact that there are a lot of foreclosures in the pipeline given the current level of serious delinquencies as well as a lot of shadow (homeowners who would like to sell but are not putting their homes on the market due to depressed prices in their market?)
Housing starts in the U.S. plunged to the lowest level in almost a year in February and wholesale prices rose more than forecast, hurdles for a recovery that the Federal Reserve said yesterday is on a “firmer footing.”
Home construction dropped 23 percent to a 479,000 annual rate, while building permits slumped last month to a record low, Commerce Department figures showed today in Washington….
Morgan Stanley and RBS Securities Inc. were among firms that reduced first-quarter growth estimates after the Commerce Department’s housing starts figures. Economists at Morgan Stanley trimmed their forecast to 2.8 percent from 2.9 percent, while RBS Securities reduced its projection to 2.6 percent from 2.8 percent….
Housing starts were forecast to fall to a 566,000 annual rate, according to the Bloomberg survey of 74 economists whose estimates ranged from 537,000 to 638,000.