Green shits!...errr, I mean shoots... Housing starts fall back to lowest level in six months http://www.marketwatch.com/story/housing-starts-stage-broad-retreat-in-october-2009-11-18 October data show starts down 10.6% and building permits off 4% By Greg Robb, MarketWatch WASHINGTON (MarketWatch) -- In a blow to the optimism that had surrounded the U.S. housing sector in recent months, housing starts fell a sharp 10.6% in October, the Commerce Department reported Wednesday. New construction on housing units dropped to a seasonally adjusted annual rate of 529,000, the lowest level since April. The 10.6% drop was the biggest percentage decline for starts since January. Both single-family homes and multifamily units declined last month. Prior to the October decline, housing starts have been flat for four straight months, on the heels of a big rebound earlier in the year from historic lows for the home-building industry. Economists surveyed by MarketWatch were expecting a stronger report, with starts pegged to have held steady at around a 590,000 annualized rate. See forecasts for other major U.S. indicators Starts had been steady around the 590,000 level of the past four months. September starts were revised higher, to a 592,000 pace from 590,000 previously reported. Analysts suggested that builders may have been reluctant to start projects close to the expected November 30th expiration of a housing tax credit. The credit has subsequently been extended by Congress until the end of next April and economists expect activity to increase as a result. "We believe housing starts' strong decline to be only temporary, and should resume modest growth and stabilization over the next several months, as the tax credit extension should support market demand and perhaps offset some of the seasonal slowness in the winter months," said Michael Rehaut, economist at JP Morgan Chase in a note to clients. Starts of single-family homes fell 6.8% on the month to a 476,000 rate, while starts of multifamily units dropped 34.6% to 53,000. Read entire government report. In the past year, starts are down 30.7%. Starts of single-family homes are off 10.9%, while starts of apartments and condos have plunged 78.1%. Meanwhile, building permits fell 4% to a seasonally adjusted annual rate of 552,000 in October. Building permits for single-family homes eased 0.2% to a 451,000 rate. Many economists consider single-family permits to be the most important number in the government's release. Permits for apartments and condos fell 17.9% to 101,000. Toward equilibrium Builders are getting closer to balancing supply and demand, the government's data showed. The number of homes under construction fell 3.4% to a record low 560,000 annual rate. The number of units completed in October rose 1.9% to an annual rate of 740,000. On Tuesday, the National Association of Home Builders said its members remained discouraged about their business in November but were a bit more hopeful about future sales. Read the full story on the home builders' index. The home builders' sentiment index held steady at 17 in November, as October's index was revised lower to 17 from the 18 previously reported The government cautions that its monthly housing data are volatile and subject to large sampling and other statistical errors. In most months, the government can't be sure whether starts increased or decreased. Large revisions are common. It can take four months for a new trend in housing starts to emerge from the data. In the past four months, housing starts have averaged 573,000 on an annualized basis, down from 589,000 in the prior four-month interval. In a separate report, the Labor Department said consumer prices rose 0.3% in October. The core consumer-price index, which excludes food and energy inputs, also rose, up 0.2%. Read how inflation remains tame.