SYMBOL LOOKUP
HOME
By Timothy R. Homan
Jan. 22 (Bloomberg) -- U.S. builders probably broke ground in December on the fewest houses since record-keeping began as sales and credit dried up, economists said before a government report today.
Housing starts fell 3.2 percent last month to an annual rate of 605,000, the lowest level since the Commerce Department started compiling data in 1959, according to the median estimate in a Bloomberg News survey. Building permits, a sign of future projects, also probably dropped to a record low.
Builders, whose shares have lost 76 percent of their value over the last three years, are slashing prices to compete with a record number of foreclosed homes coming onto the market. Barack Obama’s advisers say the president will use up to $100 billion in financial-rescue funds to ease the mortgage crisis.
“Builders are not only struggling to manage the inventory of new homes, which at the current sales pace would take more than 11 months to clear, but are also competing with the influx of foreclosed homes to the market, which is still rising,” said Julia Coronado, a senior U.S. economist at Barclays Capital Inc. in New York.
The report is due at 8:30 a.m. today in Washington. Estimates of the 69 economists surveyed range from 500,000 to 688,000.
Building permits are forecast to drop to a 600,000 pace for December, from 615,000 a month earlier, according to the survey median.
Also at 8:30 a.m., the Labor Department may report that first-time jobless claims climbed to 543,000 from 524,000 the previous week, according to the survey median.
Down Again
Residential starts will slump another 29 percent in 2009 after dropping an estimated 33 percent last year, according to a survey released Jan. 6 by the National Association of Realtors.
The National Association of Home Builders/Wells Fargo index of builder confidence slumped to a record low for January, the Washington-based association said yesterday.
U.S. foreclosure filings in December were 41 percent higher than a year earlier, pushing up the inventory of unsold homes, RealtyTrac Inc., a seller of default data, said this month.
Obama’s National Economic Council Director Lawrence Summers said last week the president intends to use between $50 billion and $100 billion of the remaining half of the $700 billion bank-bailout fund enacted last year to address the foreclosure crisis.
KB Home, the fourth-largest U.S. homebuilder that caters to first-time buyers, reported a $307.3 million net loss on Jan. 9 for the fourth quarter and said the housing market would remain difficult this year.
“The housing industry continues to confront unprecedented downward pressure,” Chief Executive Officer Jeffrey Mezger said in a conference call with analysts and investors. “These conditions persist nationally with no visible signs of lessening in the near term.”
Bloomberg Survey
===============================================================
Housing Building Initial
Starts Permits Claims
,000’s ,000’s ,000’s
===============================================================
Date of Release 01/22 01/22 01/22
Observation Period Dec. Dec. Jan. 17
---------------------------------------------------------------
Median 605 600 543
Average 608 600 545
High Forecast 688 650 594
Low Forecast 500 517 450
Number of Participants 69 49 40
Previous 625 615 524
---------------------------------------------------------------
4CAST Ltd. 600 590 540
Action Economics 620 620 540
Aletti Gestielle SGR 610 600 ---
Ameriprise Financial Inc 605 580 540
Argus Research Corp. 610 --- ---
Banc of America Securitie 600 --- ---
Bank of Tokyo- Mitsubishi 629 650 540
Barclays Capital 600 --- ---
BMO Capital Markets 606 603 540
BNP Paribas 570 --- 594
Briefing.com 610 605 540
Calyon 600 605 ---
Castlestone Management LT 610 600 575
CIBC World Markets 600 600 ---
Citi 610 610 570
Credit Suisse 580 --- 570
Daiwa Securities America 650 --- ---
Danske Bank 625 625 ---
DekaBank 630 --- ---
Desjardins Group 615 625 517
Deutsche Bank Securities 610 600 540
Deutsche Postbank AG 605 --- ---
Dresdner Kleinwort 615 --- ---
DZ Bank 600 590 ---
First Trust Advisors 605 --- 535
Fortis 650 --- ---
FTN Financial 600 580 ---
GAIN Capital 585 595 540
Goldman, Sachs & Co. 656 --- ---
Helaba 640 600 525
Herrmann Forecasting 607 603 537
High Frequency Economics 650 --- 550
Horizon Investments 620 615 ---
HSBC Markets 600 600 520
IDEAglobal 605 600 540
IHS Global Insight 612 618 ---
Informa Global Markets 610 600 535
ING Financial Markets 600 610 ---
Insight Economics 650 --- 550
Intesa-SanPaulo 600 600 ---
J.P. Morgan Chase 600 600 560
Janney Montgomery Scott L 589 583 ---
Landesbank Berlin 630 600 550
Lloyds TSB 620 610 520
Maria Fiorini Ramirez Inc 590 --- 560
Merrill Lynch 600 590 575
MFC Global Investment Man 600 595 550
Mizuho Securities --- --- 550
Moody’s Economy.com 580 595 545
Morgan Stanley & Co. 600 --- 560
National Bank Financial 610 605 ---
Natixis 580 --- ---
Nord/LB 620 620 520
PNC Bank 595 --- ---
Raymond James 610 600 ---
RBS Greenwich Capital 590 --- ---
Ried, Thunberg & Co. 600 615 550
Schneider Foreign Exchang 595 517 588
Scotia Capital 500 550 ---
Stone & McCarthy Research 605 610 560
TD Securities 600 600 550
Thomson Financial/IFR 605 595 555
UBS Securities LLC 550 580 ---
Unicredit MIB 590 560 450
University of Maryland 620 620 ---
Wachovia Corp. 640 --- ---
Wells Fargo & Co. 620 620 540
WestLB AG 615 600 ---
Westpac Banking Co. 688 605 550
Wrightson Associates 600 620 525
===============================================================
To contact the reporter on this story: Timothy R. Homan in Washington at thoman1@bloomberg.net
Last Updated: January 22, 2009 00:01 EST
