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HOUSING MARKET BOTTOM NEAR? Worst New Home Construction since 1991 Suggests "No!"

6.2% DROP IN AUGUST - NEW HOME BUILDING AT LOWEST LEVEL IN 17 YEARS!

In this week of ongoing financial turmoil, the August Housing Starts figures did little to brighten up the party.  Construction of new homes nationwide fell to a seasonally-adjusted 895,000 annual rate, according to U.S. Commerce Department statistics. 

Falling sharpest were construction of multi-family housing; single family homes did not drop as sharply, but remained low.

In addition, new building permits were down in August as well, suggesting the pace of construction could continue downward.

Experts have been hoping for indications of a housing market bottom, and the resulting added stability that would give to the economy as a whole.  But this latest data, combined with tightening mortgage credit coupled with increasing defaults and foreclosures, suggests conditions may still worsen.

"A credit crunch is materializing with significant force that completely invalidates the notion that the housing slump is 'bottoming' out" said Roger Kubarych, Chief U.S. Economist at UniCredit.

Read Kelly Evans and Jeff Bater's story in today's Wall Street Journal for more information.

DEAN MOSS & DEAN'S TEAM CHICAGO

Posted: Wednesday, September 17, 2008 2:15 PM by Dean's Team

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