WREN Report: Housing Starts Dip, Gas Prices Plummet, Mortgage Rates Jump

October 19, 2008  by in UnCategorized   

By Home Furnishings Business in on October 2008 * Privately-owned housing starts decreased 6.3 percent in September, to a seasonally adjusted annual rate of 817,000, compared with August starts of 872,000. Measured against September 2007 results, starts fell 31.1 percent. September housing starts were the lowest in more than a year.

Measured against August results, housing starts were up 5.6 percent in the Midwest and 0.5 percent in the South, and fell 20.9 percent in the Northeast and 16.8 percent in the West. Year-over-year, housing starts declined 18.2 percent in the Northeast, 21.8 percent in the Midwest, 32.5 percent in the South and 40.4 percent in the West.

The number of completed privately-owned housing units increased 11.7 percent in September to a seasonally-adjusted annual rate of 1.097 million units, compared with August figures. Measured against September 2007 results, completions slid 20.4 percent.

Housing starts and completions are tracked by the U.S. Department of Housing and Urban Development and the U.S. Department of Commerce.

* On the gasoline front, retail prices continue to fall, down 86 cents in the last month. The average retail price per gallon of unleaded was $2.99 as of October 18, according to AAA’s Daily Fuel Gauge Report. According to AAA, gas prices averaged $4.11 a gallon three months ago for regular unleaded gasoline.

Falling gas prices reflect both declining consumption and plummeting oil prices. As of Oct. 17, the price per barrel of oil was $71.85, down more than 50 percent from mid-July’s price of $147.27 and down 17 percent from this time last year.

* Thirty-year fixed-rate mortgage rates spiked sharply last week, up more than half a percentage point, according to Freddie Mac. Freddie Mac, also known as the Federal Home Loan Mortgage Corp., also tracks 15-year fixed-rate mortgage rates as well as adjustable-rate mortgage rates.

Last week’s 30-year rate of 6.46 percent was an eight-week high, up from 5.94 percent the prior week. A year ago, the 30-year fixed rate was 6.4 percent.

Weekly Review of Economic News (WREN) reports are summaries of recently-released economic statistical data that affect the home furnishings industry. WREN reports are compiled by HFB Research Editor Janice Chamberlain.