Housing starts increased 0.5 percent in September to a seasonally adjusted annual rate of 590,000. Most economists had expected an increase closer to 2 percent. Housing starts began to rebound in June and for the last four months they've hovered just above 560, 000.
New home sales are up 30 percent through August, but analysts and builders worry that sales are likely to slump once the $8,000 credit for first-time home buyers expires next month. The National Association of Home Builders and Wells Fargo released their builder confidence survey yesterday, and the indexes which measure sales expectations, conditions and traffic of prospective buyers all fell in October.
Senate Banking Committee Chairman Chris Dodd and Senator Johnny Isakson are part of a group of lawmakers pushing the Obama administration to extend the credit. They testified about the state of nation's housing market today on Capitol Hill.
"The credit is set to expire in five weeks. But the work of stabilizing the housing market won't be done. We still need to use every tool at our disposal to try and fix this problem," Dodd said.
Dodd and Isakson want the credit extended through the end of June.
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