With all eyes firmly focused on the coming war in Iraq, real economic data and analysis is pretty thin on the ground this week. The situation in the US housing market is one area which needs careful watching. Greenspan seems happy to admit he really doesn't know what is going to happen next, and who am I to disagree.
The number of new housing projects builders broke ground on in February plunged by 11 percent, the sharpest decline in nearly a decade, as bad weather and an uncertain economic climate took its toll on the residential construction market. Housing construction dropped to a seasonally adjusted annual rate of 1.62 million units in February, representing a 11 percent decline from the month before, the Commerce Department reported Tuesday.
The level of housing activity in February was weaker than the 1.75 million pace economists were forecasting. The housing and residential construction markets have been one of the few bright spots of the ailing economy. But Tuesday's report raised new questions about the extent to which the residential construction market will continue to serve as a pillar supporting the sagging national economy. Home builders, meanwhile, are less optimistic about sales prospects for March, as well as for the next six months, despite rockbottom mortgage rates, a new monthly survey by the National Association of Home Builders showed. "Even as the lowest mortgage rates in decades continue to support new-home sales, builders are understandably concerned about continued economic weakness, the situation in Iraq and the anticipated effect of these developments on consumer behavior, " said Kent Conine, president of the National Association of Home Builders.
Source: Yahoo News