Housing Starts Down 10.6% Last Month

Analysts were expecting an increase.

The building industry remains devastated. It is down about 30% from Oct. 2008.

Congress is subsidizing the purchase of new homes for a primary residence with generous tax credits.

The Los Angeles Times says:

The stumble probably reflected trepidation from the building industry in October as uncertainty remained over whether Congress would extend a popular but controversial $8,000 tax credit for first-time buyers beyond its Nov. 30 deadline.

Congress this month extended the credit through April and expanded it to include move-up buyers.

"If you are a builder, and you don't know if this tax credit is going to get renewed . . . what's the rational, prudent business decision to make? Stop swinging the hammers a little bit and see what happens in Washington," said Michael Larson, an industry analyst for Weiss Research.