Housing starts fell in June to the lowest level of the year as a slump in sales following the expiration of a government tax incentive caused U.S. builders to
benrse cut back, economists said before a report today.
The retreat following the end of government support shows it will be difficult for the industry that precipitated the recession to sustain a recovery. Mounting foreclosures will swell the supply of houses on the market and pressure prices, while prospective buyers shy away as a lack of jobs shakes confidence in the world’s largest economy.
“We’re going to see general weakness in the housing market, at least into the fourth quarter,” said David Sloan, a senior economist at 4Cast Ltd. in New York. “Sales were boosted until April by the tax credit and now we’re seeing a sharp falloff.”
The Commerce Department’s homebuilding figures are due at 8:30 a.m. in Washington. Estimates ranged from 525,000 to 620,000.
Housing’s inability to maintain a rebound is one reason the economic recovery is not gaining speed. Building permits were probably little changed at 575,000 from 574,000 in May, the survey showed, signaling construction is not likely to rebound in coming months.
