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The housing starts stats have come out and they are not dropping anywhere near the level they should be. I have heard all of the stories about how once the pipeline is started they can not stop, but the glut of inventory is not helping.

This reminds me of the airlines after 9/11. With the airlines hemorrhaging money none of them wanted to cut flights as they were still obsessed with market share and not profitability. It was not until they started cutting flights and reducing inventory did they become profitable. The home building companies are hemorrhaging money and it will get worse until they balance their inventory with demand.

Housing starts rose 2.3 percent to an annual rate of 1.467 million, led by an increase in apartments, while construction of single-family homes fell, the Commerce report showed. The government also revised May starts down to a 1.434 million pace.
The rise in starts was led by a 9 percent increase in the West. Construction also rose in the South, by 2.4 percent. It fell by 3.7 percent in the Midwest and declined 2.4 percent in the Northeast.
Rising mortgage rates and stricter lending rules are impeding a rebound in housing, even as builders lower prices and add incentives. A glut of unsold properties will probably continue to drag down construction and the economy for the rest of the year, economists said. via The Boston Globe.

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