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Wednesday, July 18, 2007

U.S. June Housing Starts Rise 2.3%; Permits Decline

" Builders in the U.S. unexpectedly started work on more homes last month while permits for future construction fell to the lowest level in a decade, suggesting a recovery from the housing slump may not be quick.

Housing starts rose 2.3 percent to an annual rate of 1.467 million, led by an increase in apartment buildings, the Commerce Department said today in Washington. Building permits fell 7.5 percent to a 1.406 million rate. "

Why are starts up? Are the builders just finishing the properties and projects they're already committed to? The decline in permits suggest a pretty dismal outlook on the future.

" Rising mortgage rates and stricter lending rules are impeding a rebound in housing, even as builders lower prices and add more incentives. A glut of unsold properties will probably continue to drag down construction and the economy for the rest of the year, economists said. "

The rules and regulations are about to tighten further. The pressure is now even on Bernanke to step in and 'curb predatory lending practices'. (Blogpost: Bernanke Chips Away at Greenspan's Free-Market Legacy)

Source: U.S. June Housing Starts Rise 2.3%; Permits Decline (Update2) (