Home Starts Tumble and Mortgage Delinquencies Rise, Casting Cloud Over Recovery
The U.S. housing market is sputtering again, adding to doubts about the vigor of the economic recovery. Just a few months after housing showed signs of leveling off, bad weather and uncertainty over the extension of a home-buyer tax credit sent new-home starts in October tumbling 10.6% from the previous month. They fell to the lowest level since April, the Commerce Department said Wednesday. Starts of single-family houses fell 6.8%. Earlier this month, Congress expanded the tax credit and extended it through April, so building should improve. Still, the latest data portend poorly for the economy overall, and for fourth-quarter growth…Meanwhile, more Americans who bought homes during the boom are falling into mortgage limbo. About 3.4% of U.S. households — or about 1.9 million homeowners — are 120 days or more overdue on their payments, but not yet in foreclosure, according to LPS Applied Analytics, a research firm in Denver. That is up from 1.5% a year earlier.Many of these people are likely to lose their homes over the next few years. That means more bank-owned homes will hit a market already suffering from oversupply.
By James R. Hagerty and Sara Murray, Nov. 19, 2009 WSJ