–Q4 C/A -$113.3B or 3.1% of GDP; Priv Foreigners Buy $37.5b Tsys

By Yali N’Diaye

WASHINGTON (MNI) – U.S. housing starts fell 22.5% to an annual rate
of 479,000 units in February, the lowest since April 2009, while
building permits drop suggested home-building activity ahead won’t pick
up anytime soon.

In a separate release, the Commerce Department data showed both net
foreign private and official purchases of U.S. Treasuries eroded in Q4.

At 479,000, housing starts were weaker than the consensus of
560,000 among analysts surveyed by MNI, and were even below the most
pessimistic forecast of 540,000, showing better weather conditions
relative to January did not help.

Just as the January +18.4% gain was nearly entirely explained by
multi-family starts, which rose 87.4%, the February drop was mostly
explained by a drop in that sector: -46.1%.

Still, single-family starts were down 11.8%.

No region escaped the drop in housing starts in February, with the
Midwest leading the pack at -48.6%, followed by the Northeast at -37.5%,
the West at -28.0% and the South at -6.3%.

Permits fell 8.2% to a record low 517,000, with single-family units
down 9.3%, suggesting some slowdown ahead.

In fact, builder confidence in the market for newly built,
single-family homes was nearly unchanged in March, when the National
Association of Home Builders/Wells Fargo reported the Housing Market
Index was at 17, up from 16 in February.

NAHB Chairman Bob Nielsen noted, “the same factors that have been
weighing down the market are still very much in play, particularly
competition from short sales and foreclosures, consumers inability to
sell their existing home, appraisals that are coming in below
construction cost due to the inappropriate use of distressed properties
as comps, and restrictive lending conditions for both buyers and
builders.”

In a separate report Wednesday, the Q4 current account deficit
narrowed to $113.3b — 3.1% of GDP vs 3.4% in Q3 — from $125.5b in Q3
as the goods and services deficit gap narrowed to $116.7b from $132.6b.

The data showed that foreign purchases of U.S. Treasuries decreased
significantly to $37.5b from $64.5b for private buyers and to $77.2 from
$189.0b for official buyers.

**Market News International Washington Bureau: (202)371-2121**

[TOPICS: MAUDS$,M$U$$$,MT$$$$,MAUDR$]