Lower rates coming?

An Awful October for Housing Starts

With new-home construction dropping to its lowest level in over six years, markets are betting the Fed could start cutting rates by June

by Michael Englund and Rick MacDonald for Businessweek.com

The U.S. housing slump appears to be deepening based on a government report released Nov. 17. Housing starts plunged 14.6% in October to a 1.486-million-unit annual pace—well below economists' median forecast of a 1.70-million-unit pace. Starts have now fallen in seven of the last nine months, and are currently at the lowest level since July, 2000.

The massive drop in October bucked the trend of improvement in other housing sector indicators since the big June-August downside correction and has left the market still focused on downside housing market risk.