U.S. Housing Market slowing down

Filed in archive Economy on January 21, 2006

Reports came out today that the U.S housing market is definitely slowing down. The U. S. Census Bureau says that builders started up only 1.933 million new homes last month, down from an expected 2.121 starts that had been expected even after a downward revision.

Building permits also floundered at a nine month low of 2.068 million. This seems to be the confirming statistics that offer the evidence that the booming housing market is starting to slow down. Subsequently, another substantial component to inflation is taken off the table.

Another selling point for the dollar came later in the day when the Philly Fed index, measuring factory activity in the area, for January fell sharply. After the greater than expected decline in the Empire state manufacturing index earlier in the week, the steep drop from 10.9 to 3.3 in manufacturing for the Philadelphia area adds to concerns that, like the housing sector, the manufacturing sector could be weakening.

There was some positive news though as jobless claims for the period fell to the lowest level in about 6 years.

Those who were bulls on the dollar now have some concerns about its continuing strength.