Builders in the U.S. probably began work on fewer homes in September, a sign the residential real estate market will be slow to recover from the worst recession since the 1930s, economists said before a report today.
Housing starts fell 3 percent to a 580,000 annual rate, according to the median estimate of 71 economists surveyed by Bloomberg News. Building permits, a proxy of future production, were little changed, the survey showed.
Mounting foreclosures, near record-low home sales and a lack of jobs will make it difficult for housing, the industry that precipitated the economic slump, to rebound. Broadening foreclosure moratoria caused by faulty documentation at some of the nation’s biggest banks also raises the risk the mending process will be delayed even more.
“Builders are faced with weak new-home sales, competition from foreclosures and, if anything, uncertainty around the foreclosure environment has increased,” said Michelle Meyer, a senior U.S. economist at BofA Merrill Lynch Global Research in New York. The housing outlook is “deteriorating,” she said.
The Commerce Department’s report is due at 8:30 a.m. in Washington. Survey estimates ranged from 550,000 to 624,000. Starts plunged to a record-low 477,000 pace in April 2009 after reaching a three-decade high of 2.27 million in January 2006.