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US housing market stays weak
By Martin Crutsinger |
August 18, 2010, Wednesday
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Print Edition
Print Edition
A WEAK United States housing market received a tiny boost from apartment construction last month. But the overall outlook remained dim as applications for building permits fell to the lowest level in 14 months.
Construction of new homes and apartments rose 1.7 percent last month, the US Commerce Department said yesterday. Driving the increase was a 32.6 percent surge in apartment and condominium construction - a small fraction of the market.
Still, requests for building permits, considered a good sign of future activity, fell 3.1 percent.
"The bad news is that activity is likely to remain depressed for several years," said Paul Ashworth, senior US economist at Capital Economics. "The good news, however, is that housing is so depressed it is hard to see activity falling much further from such a severely depressed level."
Separately, the US Labor Department said wholesale prices rose 0.2 percent last month with higher costs of food, cars and light trucks. It was the first increase to the Producer Price Index since March. Still the modest increases show that the weak economy isn't spurring widespread price rises.
Excluding volatile food and energy costs, so-called "core" producer prices rose 0.3 percent in July, the ninth straight increase. Core prices have risen 1.5 percent in the past year.
A rebound in housing is considered critical for a sustained economic recovery. But builders continue to struggle with weak demand for new homes caused by high unemployment and a glut of foreclosed homes on the market.
The July increase in housing construction pushed total activity to a seasonally adjusted annual rate of 546,000 units.
Construction of new homes and apartments rose 1.7 percent last month, the US Commerce Department said yesterday. Driving the increase was a 32.6 percent surge in apartment and condominium construction - a small fraction of the market.
Still, requests for building permits, considered a good sign of future activity, fell 3.1 percent.
"The bad news is that activity is likely to remain depressed for several years," said Paul Ashworth, senior US economist at Capital Economics. "The good news, however, is that housing is so depressed it is hard to see activity falling much further from such a severely depressed level."
Separately, the US Labor Department said wholesale prices rose 0.2 percent last month with higher costs of food, cars and light trucks. It was the first increase to the Producer Price Index since March. Still the modest increases show that the weak economy isn't spurring widespread price rises.
Excluding volatile food and energy costs, so-called "core" producer prices rose 0.3 percent in July, the ninth straight increase. Core prices have risen 1.5 percent in the past year.
A rebound in housing is considered critical for a sustained economic recovery. But builders continue to struggle with weak demand for new homes caused by high unemployment and a glut of foreclosed homes on the market.
The July increase in housing construction pushed total activity to a seasonally adjusted annual rate of 546,000 units.
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