Builders began work on fewer U.S. homes than projected in August, helping explain why Federal Reserve policy makers decided to maintain stimulus aimed at sustaining the economic expansion.
Housing starts rose 0.9 percent to a 891,000 annual rate, following the prior month’s 883,000 pace that was weaker than previously estimated, a Commerce Department report showed today in Washington. The median estimate of 83 economists surveyed by Bloomberg called for 917,000. Permits, a proxy for future projects, dropped more than forecast.
Builders such as Hovnanian Enterprises Inc. say any industry slowdown caused by the highest mortgage rates in more than two years will prove short-lived. The yield on Treasury notes plunged today after the Fed unexpectedly refrained from reducing the $85 billion pace of monthly bond buying, saying it needs to see more signs of lasting improvement in the economy.