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Saturday, September 26, 2009
Thursday, August 27, 2009
August 27, 2009 The House of Your Dreams
August 27, 2009
The House of Your Dreams
By SARAH KERSHAW
AMERICANS aren’t just living the real estate collapse. They’re dreaming it.
Foreclosure, eviction and an uncertain real estate market are providing material for disturbing dreams and nightmares about home, which has an especially powerful place in the psyche, psychologists say, symbolizing safety, comfort, identity and — to the Freudians — mother.
At a time of collective angst and fear of economic insecurity, psychologists say more patients are recounting stressful dreams that revolve around the theme of home. Fear of homelessness, they say, is one of the most primal feelings on the emotional spectrum. A deep sense of disillusionment, betrayal and mistrust resulting from the mortgage and banking crises is also pervasive.
“People are trying to make sense of this big unknowable, overwhelming, insecure world,” said Henry M. Seiden, a psychologist in New York who published a paper in April, “On the Longing for Home,” in the journal Psychoanalytic Psychology, arguing that the concept of home has not drawn enough focus from academics in the field, beyond the classic Freudian interpretations.
While some people ignore the messages in their dreams, others look to them for guidance.
Susanna Cohen, 31, a nurse practitioner and midwife in Salt Lake City, was feeling spooked by the mortgage crisis and began having disturbing dreams in May, while contemplating buying her first home. Many were about people forced to live in places they didn’t want to live.
“I had heightened anxiety because of everything that’s happened,” Ms. Cohen said. “Was this an appropriate investment for me to be making at this point? Am I going to look back in five years and find out that I’m in a similar situation as all these other people who have had their houses foreclosed? And I didn’t know if I wanted to be part of a system that is so morally corrupt.”
After deciding to make a bid last month, she was torn over what to offer for the house, a two-bedroom brick bungalow listed at $250,000. She said she felt some obligation to make a bid that was fair to the seller, but she feared overbidding, and wished she had some way of finding out about the seller’s finances.
Then she had a dream that she saw the seller’s mortgage statement and that he owed $80,000 on the house. She woke up, she said, thinking that her bid, which she did not want to disclose, was fair, and so she made the offer.
As the negotiations continued, she had several more vivid dreams, some reassuring her that her hunches were leading her down the right path and others involving danger, fear and what she interpreted as cautionary messages.
The night after she made the bid, she dreamed she was sitting on the porch of the house eating ice cream with a friend, when they decided they wanted root beer floats. They walked over to a nearby supermarket and, as she was standing at the vending machine, an aggressive and threatening man approached. Another man appeared to save her, but he ended up stabbing her in the arm with a hypodermic needle, and she slowly slumped to the ground.
She made eye contact with a passer-by and called for help, and then woke up. She was left with the feeling that, like the men in her dream, all the players involved in her real estate deal — the agents and the seller — were out for themselves, and she wasn’t protecting herself.
“I’m not shy about the fact that I let my dreams influence my behavior,” Ms. Cohen said. “The times in my life that I have discounted a dream because I felt, ‘Oh, that’s just a dream,’ it comes back to bite me. But that’s sort of my internal struggle: trying to figure out which of these dreams do I allow myself to believe in.”
The day after her dream about being stabbed with a needle, she heard from her real estate agent that there was another offer on the house. She wrote a letter to the seller expressing her appreciation for the house and its history, promising to maintain its original details and charm.
He countered with the same offer the other bidder had made, $230,000, and she accepted, but then he decided to go with the other buyer anyway, and she was crushed.
In the end, she said, it was not her dreams, but the people involved in the negotiations that led her astray. After she decided on a bid, the broker delayed the meeting where she was going to make the offer by several days, Ms. Cohen said. During that time, the owner held an open house, inviting the other bidders into the picture.
Still, “It is an inanimate object after all,” she said. “So I will recover.”
WHILE many ancient cultures have used dreams as guideposts, the practice has not been as common in modern times. But a surprising study published last March found that more people see dreams as informative than had previously been believed.
The study, “When Dreaming Is Believing: The (Motivated) Interpretation of Dreams,” by Michael I. Norton and Carey K. Morewedge, researchers from Harvard and Carnegie Mellon, involved a survey of 1,000 people in the United States, South Korea and India, including engineering students from the Massachusetts Institute of Technology who, the researchers suspected, would be less likely to give weight to their dreams.
They found that most of the participants believed their dreams contained more meaningful information about the world than similar thoughts they had while awake. And, generally, the dreams people had confirmed their beliefs and biases about the subjects of their dreams.
The study was done amid a long-running debate between scientists and dream psychologists about whether dreams are a result of the brain sputtering out random impulses, anxieties and data, or are meaningful barometers of emotion and a source of insight into real-life conflicts.
Paul Thomas, 47, who sells motorcycles at a Harley Davidson dealership in Stamford, Conn., said he had a series of dreams that helped him decide what to do about his housing situation.
In 2006, he and his wife moved from Stamford to Brooklyn, where he took a job in the restaurant business, and she found one in banking. Soon, they got into a legal battle with their landlord over problems in their apartment building, including lack of heat, water leaks and the building’s legal status. The court ruled in their favor, asking them to pay one month’s rent and leave by the end of 2007, but they were not out by the deadline and were evicted.
The city marshal showed up at 7:30 one morning, giving them 15 minutes to move out all their belongings. While they stayed at a neighbor’s house, Mr. Thomas said, he dreamed that he was begging outside a coffee shop in Union Square, holding a bucket and a sign that said he was homeless. “I’ve never been homeless in my life,” he said. “This feeling in my dream was such panic and such hopelessness.”
They found another apartment in the same neighborhood, but two months later, a court officer appeared on a Saturday morning with a notice of foreclosure on the building intended for the landlord, who lived at another address. They moved again, only to discover that their new landlord was constructing what appeared to be an illegal apartment in the basement, and was working on the gas and electricity lines. They complained and a nasty confrontation ensued.
At this point, Mr. Thomas had a nightmare that was both frightening and highly entertaining. In the dream, he was looking out a window of the apartment, which was surrounded by cartoon and movie villains — Yosemite Sam, the Penguin and the Riddler from Batman — with guns, and was shooting at them through the window.
When they started advancing toward the house, he ran upstairs, where his wife was waiting with his “troops” — the cast of “Sex and the City,” and Cat Woman from the 1960’s TV show “Batman,” who was, he said, “always on the edge of good and evil,” but in the dream was a force for good. The dream made him laugh, but it also “reinforced the fact that I knew I had to get out of there,” he said. “My dream mind was telling me if you don’t get out of there, you are going to be shot at, at some point. The landlord was boiling mad.”
They returned to Stamford and are now looking for a house to buy.
In recent years, the field of dream psychology has begun giving more credence to the dreamer’s interpretation, rather than the analyst’s. According to Ellen Y. Siegelman, a Jungian psychoanalyst in Berkeley, Calif., patients in therapy often find that dreams of home, in particular, offer a way to chart their progress.
“I’ve seen people in therapy go from dreams at the beginning of houses falling down, needing to be propped up or in disrepair,” Dr. Siegelman said. “If you follow the sequence in dreams, quite often at the end, there are dreams of houses fixed up, new light and extra rooms. That’s an interesting marker of where somebody is psychologically.”
MANY psychologists caution against taking dreams about houses too literally.
“Things are not necessarily what they seem to be,” said Gemma Marangoni Ainslie, a neo-Freudian psychoanalyst in Austin, Tex., who, like many other therapists, sees recurring dreams as clues about personal struggles and ongoing conflicts.
For nearly 15 years, Cara Letofsky, 45, a housing policy aide to Mayor R. T. Rybak of Minneapolis, had a recurring dream that she was moving into a new apartment with her college roommates. After all the roommates had chosen their rooms, they suddenly discovered an extra one, something that caused a feeling of anxiety and loss of control, because order was disrupted — what would they do with the extra room?
No matter what her living situation, the dreams continued: when she was living in New York, getting a master’s degree, when she was single, when she moved to Minneapolis, got married, bought a house with her husband and had children, now 6 and 9.
Finally, a few years ago, when she and her husband completed a renovation, adding a guest room and a storage room and expanding the kitchen and master bedroom, the dreams stopped.
“I was still seeking this place that was home to me,” she said. “I was still seeking the emotional security of a physical space. Even though I had one, it didn’t have the marker of being mine until the house was finished.”
The fear of intrusions like burglaries can also produce vivid dreams, psychologists say.
Pamela Mink, 46, an assistant professor of epidemiology at the Rollins School of Public Health at Emory University in Atlanta, had recurring dreams about calling 911 after someone had broken into the house she rented there. In some of the dreams, she said, the 911 operators were speaking languages she could not understand; in one, she was swearing at the operator, who told her that if she kept cursing she would get no help.
Dr. Mink had other recurring dreams that were less obvious in their symbolism — most notably, one about her father burying bodies in the garden, which she began having when she was a child. In the dreams, she said, she never knew whom he was burying, and never asked.
She said she has not discussed the dreams, which are more mysterious than scary, with a therapist. But around the time of her father’s death, in 1996, she had the final version of the dream, perhaps resolving a conflict or revealing something she did not know about her father, but certainly solving a mystery played out in her unconscious.
Around this time, in her waking life, she said, she asked her father a lot of questions because he was dying, and in the last dream, she tried to get him to tell her whom he was burying.
In the dream, there was a coffin laid on a large, thick sheet of ice. At first, her father refused to tell her who was inside, saying only that it was someone famous. Then, after swearing her to secrecy, he agreed to tell her, revealing it was Frank Lloyd Wright.
She asked him repeatedly why he was burying the architect in their garden, and then said, “Wait a minute, is this because you think your property value will go up?” Her father gave her a knowing smile, and she glanced up at her bedroom and saw a Chinese man in a red silk robe staring at them.
“There was something very ceremonial about the whole thing, and the property value thing was weird,” she said. “My dad wasn’t a financial mogul, he was a college professor,” a psychologist who ran a sleep lab.
The dream ended as she and her siblings sang Simon and Garfunkel’s “So Long, Frank Lloyd Wright,” while her father worked in the garden.
The House of Your Dreams
By SARAH KERSHAW
AMERICANS aren’t just living the real estate collapse. They’re dreaming it.
Foreclosure, eviction and an uncertain real estate market are providing material for disturbing dreams and nightmares about home, which has an especially powerful place in the psyche, psychologists say, symbolizing safety, comfort, identity and — to the Freudians — mother.
At a time of collective angst and fear of economic insecurity, psychologists say more patients are recounting stressful dreams that revolve around the theme of home. Fear of homelessness, they say, is one of the most primal feelings on the emotional spectrum. A deep sense of disillusionment, betrayal and mistrust resulting from the mortgage and banking crises is also pervasive.
“People are trying to make sense of this big unknowable, overwhelming, insecure world,” said Henry M. Seiden, a psychologist in New York who published a paper in April, “On the Longing for Home,” in the journal Psychoanalytic Psychology, arguing that the concept of home has not drawn enough focus from academics in the field, beyond the classic Freudian interpretations.
While some people ignore the messages in their dreams, others look to them for guidance.
Susanna Cohen, 31, a nurse practitioner and midwife in Salt Lake City, was feeling spooked by the mortgage crisis and began having disturbing dreams in May, while contemplating buying her first home. Many were about people forced to live in places they didn’t want to live.
“I had heightened anxiety because of everything that’s happened,” Ms. Cohen said. “Was this an appropriate investment for me to be making at this point? Am I going to look back in five years and find out that I’m in a similar situation as all these other people who have had their houses foreclosed? And I didn’t know if I wanted to be part of a system that is so morally corrupt.”
After deciding to make a bid last month, she was torn over what to offer for the house, a two-bedroom brick bungalow listed at $250,000. She said she felt some obligation to make a bid that was fair to the seller, but she feared overbidding, and wished she had some way of finding out about the seller’s finances.
Then she had a dream that she saw the seller’s mortgage statement and that he owed $80,000 on the house. She woke up, she said, thinking that her bid, which she did not want to disclose, was fair, and so she made the offer.
As the negotiations continued, she had several more vivid dreams, some reassuring her that her hunches were leading her down the right path and others involving danger, fear and what she interpreted as cautionary messages.
The night after she made the bid, she dreamed she was sitting on the porch of the house eating ice cream with a friend, when they decided they wanted root beer floats. They walked over to a nearby supermarket and, as she was standing at the vending machine, an aggressive and threatening man approached. Another man appeared to save her, but he ended up stabbing her in the arm with a hypodermic needle, and she slowly slumped to the ground.
She made eye contact with a passer-by and called for help, and then woke up. She was left with the feeling that, like the men in her dream, all the players involved in her real estate deal — the agents and the seller — were out for themselves, and she wasn’t protecting herself.
“I’m not shy about the fact that I let my dreams influence my behavior,” Ms. Cohen said. “The times in my life that I have discounted a dream because I felt, ‘Oh, that’s just a dream,’ it comes back to bite me. But that’s sort of my internal struggle: trying to figure out which of these dreams do I allow myself to believe in.”
The day after her dream about being stabbed with a needle, she heard from her real estate agent that there was another offer on the house. She wrote a letter to the seller expressing her appreciation for the house and its history, promising to maintain its original details and charm.
He countered with the same offer the other bidder had made, $230,000, and she accepted, but then he decided to go with the other buyer anyway, and she was crushed.
In the end, she said, it was not her dreams, but the people involved in the negotiations that led her astray. After she decided on a bid, the broker delayed the meeting where she was going to make the offer by several days, Ms. Cohen said. During that time, the owner held an open house, inviting the other bidders into the picture.
Still, “It is an inanimate object after all,” she said. “So I will recover.”
WHILE many ancient cultures have used dreams as guideposts, the practice has not been as common in modern times. But a surprising study published last March found that more people see dreams as informative than had previously been believed.
The study, “When Dreaming Is Believing: The (Motivated) Interpretation of Dreams,” by Michael I. Norton and Carey K. Morewedge, researchers from Harvard and Carnegie Mellon, involved a survey of 1,000 people in the United States, South Korea and India, including engineering students from the Massachusetts Institute of Technology who, the researchers suspected, would be less likely to give weight to their dreams.
They found that most of the participants believed their dreams contained more meaningful information about the world than similar thoughts they had while awake. And, generally, the dreams people had confirmed their beliefs and biases about the subjects of their dreams.
The study was done amid a long-running debate between scientists and dream psychologists about whether dreams are a result of the brain sputtering out random impulses, anxieties and data, or are meaningful barometers of emotion and a source of insight into real-life conflicts.
Paul Thomas, 47, who sells motorcycles at a Harley Davidson dealership in Stamford, Conn., said he had a series of dreams that helped him decide what to do about his housing situation.
In 2006, he and his wife moved from Stamford to Brooklyn, where he took a job in the restaurant business, and she found one in banking. Soon, they got into a legal battle with their landlord over problems in their apartment building, including lack of heat, water leaks and the building’s legal status. The court ruled in their favor, asking them to pay one month’s rent and leave by the end of 2007, but they were not out by the deadline and were evicted.
The city marshal showed up at 7:30 one morning, giving them 15 minutes to move out all their belongings. While they stayed at a neighbor’s house, Mr. Thomas said, he dreamed that he was begging outside a coffee shop in Union Square, holding a bucket and a sign that said he was homeless. “I’ve never been homeless in my life,” he said. “This feeling in my dream was such panic and such hopelessness.”
They found another apartment in the same neighborhood, but two months later, a court officer appeared on a Saturday morning with a notice of foreclosure on the building intended for the landlord, who lived at another address. They moved again, only to discover that their new landlord was constructing what appeared to be an illegal apartment in the basement, and was working on the gas and electricity lines. They complained and a nasty confrontation ensued.
At this point, Mr. Thomas had a nightmare that was both frightening and highly entertaining. In the dream, he was looking out a window of the apartment, which was surrounded by cartoon and movie villains — Yosemite Sam, the Penguin and the Riddler from Batman — with guns, and was shooting at them through the window.
When they started advancing toward the house, he ran upstairs, where his wife was waiting with his “troops” — the cast of “Sex and the City,” and Cat Woman from the 1960’s TV show “Batman,” who was, he said, “always on the edge of good and evil,” but in the dream was a force for good. The dream made him laugh, but it also “reinforced the fact that I knew I had to get out of there,” he said. “My dream mind was telling me if you don’t get out of there, you are going to be shot at, at some point. The landlord was boiling mad.”
They returned to Stamford and are now looking for a house to buy.
In recent years, the field of dream psychology has begun giving more credence to the dreamer’s interpretation, rather than the analyst’s. According to Ellen Y. Siegelman, a Jungian psychoanalyst in Berkeley, Calif., patients in therapy often find that dreams of home, in particular, offer a way to chart their progress.
“I’ve seen people in therapy go from dreams at the beginning of houses falling down, needing to be propped up or in disrepair,” Dr. Siegelman said. “If you follow the sequence in dreams, quite often at the end, there are dreams of houses fixed up, new light and extra rooms. That’s an interesting marker of where somebody is psychologically.”
MANY psychologists caution against taking dreams about houses too literally.
“Things are not necessarily what they seem to be,” said Gemma Marangoni Ainslie, a neo-Freudian psychoanalyst in Austin, Tex., who, like many other therapists, sees recurring dreams as clues about personal struggles and ongoing conflicts.
For nearly 15 years, Cara Letofsky, 45, a housing policy aide to Mayor R. T. Rybak of Minneapolis, had a recurring dream that she was moving into a new apartment with her college roommates. After all the roommates had chosen their rooms, they suddenly discovered an extra one, something that caused a feeling of anxiety and loss of control, because order was disrupted — what would they do with the extra room?
No matter what her living situation, the dreams continued: when she was living in New York, getting a master’s degree, when she was single, when she moved to Minneapolis, got married, bought a house with her husband and had children, now 6 and 9.
Finally, a few years ago, when she and her husband completed a renovation, adding a guest room and a storage room and expanding the kitchen and master bedroom, the dreams stopped.
“I was still seeking this place that was home to me,” she said. “I was still seeking the emotional security of a physical space. Even though I had one, it didn’t have the marker of being mine until the house was finished.”
The fear of intrusions like burglaries can also produce vivid dreams, psychologists say.
Pamela Mink, 46, an assistant professor of epidemiology at the Rollins School of Public Health at Emory University in Atlanta, had recurring dreams about calling 911 after someone had broken into the house she rented there. In some of the dreams, she said, the 911 operators were speaking languages she could not understand; in one, she was swearing at the operator, who told her that if she kept cursing she would get no help.
Dr. Mink had other recurring dreams that were less obvious in their symbolism — most notably, one about her father burying bodies in the garden, which she began having when she was a child. In the dreams, she said, she never knew whom he was burying, and never asked.
She said she has not discussed the dreams, which are more mysterious than scary, with a therapist. But around the time of her father’s death, in 1996, she had the final version of the dream, perhaps resolving a conflict or revealing something she did not know about her father, but certainly solving a mystery played out in her unconscious.
Around this time, in her waking life, she said, she asked her father a lot of questions because he was dying, and in the last dream, she tried to get him to tell her whom he was burying.
In the dream, there was a coffin laid on a large, thick sheet of ice. At first, her father refused to tell her who was inside, saying only that it was someone famous. Then, after swearing her to secrecy, he agreed to tell her, revealing it was Frank Lloyd Wright.
She asked him repeatedly why he was burying the architect in their garden, and then said, “Wait a minute, is this because you think your property value will go up?” Her father gave her a knowing smile, and she glanced up at her bedroom and saw a Chinese man in a red silk robe staring at them.
“There was something very ceremonial about the whole thing, and the property value thing was weird,” she said. “My dad wasn’t a financial mogul, he was a college professor,” a psychologist who ran a sleep lab.
The dream ended as she and her siblings sang Simon and Garfunkel’s “So Long, Frank Lloyd Wright,” while her father worked in the garden.
Wednesday, August 26, 2009
NYC Apartment Rents Fall as Tenants Gain Leverage
Aug. 25 (Bloomberg) -- Manhattan apartment rents fell as much as 10 percent in August from a year ago as tenants gained negotiating power in the recession and forced landlords to offer concessions.
In buildings attended by doormen, rents on one-bedroom apartments dropped 10 percent from a year earlier to an average of $3,274 a month, according to a report by the Real Estate Group of New York. Studio prices fell 7 percent at those properties to $2,329 and two-bedrooms declined almost 6.9 percent to $5,161. Soho and TriBeCa were the most expensive neighborhoods.
Rents in Manhattan are falling as unemployment climbs. The number of job seekers rose to 402,200 in July, the most since 1992, New York City’s Comptroller William Thompson said yesterday. Landlords are offering incentives such as free rent and paying brokerage fees to lure tenants, said Daniel Baum, chief executive officer of the Real Estate Group.
“The concessions out there right now are pretty aggressive,” he said.
The city’s unemployment rate climbed to a 12-year high of 9.6 percent in July even as the national rate ticked down to 9.4 percent. The U.S. economy has lost 6.7 million jobs since the recession began in December 2007, making it the biggest employment slump in the last eight decades. Economists surveyed by Bloomberg predict the unemployment rate will reach 10 percent by early next year.
Rising U.S. Vacancies
That translates into less pricing power for landlords. U.S. apartment vacancies jumped to 7.5 percent in the second quarter, the highest level in 22 years, according to New York-based research firm Reis Inc. Asking rents dropped 0.7 percent from a year earlier to an average of $1,040 a month.
Rising vacancies and falling rents sent shares of real estate investment trusts that own apartments lower in the last year. The 13-member Bloomberg index of apartment landlords fell 36 percent in the 12 months through yesterday.
The Manhattan survey released today is based on data from more than 10,000 available apartment listings, according to the Real Estate Group.
In Manhattan’s non-doorman buildings, the average rent for studio apartments fell 8 percent to $1,931. One-bedrooms dropped 5.9 percent to $2,606 and two-bedrooms fell 8.2 percent to an average of $3,527.
On the Upper West Side, the average rent for a one-bedroom apartment in a doorman building was $3,236. In Greenwich Village, a similar apartment averaged $3,654.
Across Central Park on the Upper East Side, the average rent for a one-bedroom apartment in a doorman building is $3,276. In Gramercy Park, the price averages $3,656.
The least expensive average rents were in Harlem, where the monthly price ranged from $1,274 for a studio to $2,105 for a two-bedroom unit in a building without doormen.
To contact the reporter on this story: Brian Louis in Chicago at blouis1@bloomberg.net.
In buildings attended by doormen, rents on one-bedroom apartments dropped 10 percent from a year earlier to an average of $3,274 a month, according to a report by the Real Estate Group of New York. Studio prices fell 7 percent at those properties to $2,329 and two-bedrooms declined almost 6.9 percent to $5,161. Soho and TriBeCa were the most expensive neighborhoods.
Rents in Manhattan are falling as unemployment climbs. The number of job seekers rose to 402,200 in July, the most since 1992, New York City’s Comptroller William Thompson said yesterday. Landlords are offering incentives such as free rent and paying brokerage fees to lure tenants, said Daniel Baum, chief executive officer of the Real Estate Group.
“The concessions out there right now are pretty aggressive,” he said.
The city’s unemployment rate climbed to a 12-year high of 9.6 percent in July even as the national rate ticked down to 9.4 percent. The U.S. economy has lost 6.7 million jobs since the recession began in December 2007, making it the biggest employment slump in the last eight decades. Economists surveyed by Bloomberg predict the unemployment rate will reach 10 percent by early next year.
Rising U.S. Vacancies
That translates into less pricing power for landlords. U.S. apartment vacancies jumped to 7.5 percent in the second quarter, the highest level in 22 years, according to New York-based research firm Reis Inc. Asking rents dropped 0.7 percent from a year earlier to an average of $1,040 a month.
Rising vacancies and falling rents sent shares of real estate investment trusts that own apartments lower in the last year. The 13-member Bloomberg index of apartment landlords fell 36 percent in the 12 months through yesterday.
The Manhattan survey released today is based on data from more than 10,000 available apartment listings, according to the Real Estate Group.
In Manhattan’s non-doorman buildings, the average rent for studio apartments fell 8 percent to $1,931. One-bedrooms dropped 5.9 percent to $2,606 and two-bedrooms fell 8.2 percent to an average of $3,527.
On the Upper West Side, the average rent for a one-bedroom apartment in a doorman building was $3,236. In Greenwich Village, a similar apartment averaged $3,654.
Across Central Park on the Upper East Side, the average rent for a one-bedroom apartment in a doorman building is $3,276. In Gramercy Park, the price averages $3,656.
The least expensive average rents were in Harlem, where the monthly price ranged from $1,274 for a studio to $2,105 for a two-bedroom unit in a building without doormen.
To contact the reporter on this story: Brian Louis in Chicago at blouis1@bloomberg.net.
Tuesday, August 18, 2009
Housing Starts in U.S. Fell on Multi-Family Units
By Shobhana Chandra and Bob Willis
Aug. 18 (Bloomberg) -- Housing starts in the U.S. unexpectedly fell in July, pulled down by multifamily dwellings, while single-family starts which make up most of the industry rose to the highest level since October.
The 1 percent decline in starts to an annual rate of 581,000 was the first drop in three months and followed a 587,000 rate in June, the Commerce Department said today in Washington. Construction of single-family houses, which account for 75 percent of the industry, rose 1.7 percent to a 490,000 rate, today’s report showed.
Single-family home construction has been rising since March, a sign that falling home values and stimulus efforts such as a tax credit for first-time buyers are starting to reverse the housing meltdown that triggered the financial crisis. While the economy is forecast to grow this quarter, foreclosures, tight credit and job losses will temper the recovery.
“It’s still an indication that we’re at a turning point,” Jonathan Basile, an economist at Credit Suisse Holdings Inc. in New York, said before the report. “The housing recovery will look uneven until there’s more visibility in the economy.”
Stock-index futures pared gains after the report and Treasuries rose. The yield on the benchmark 10-year note fell to 3.50 percent at 8:43 a.m. in New York, from 3.52 percent earlier in the day. Futures on the Standard & Poor’s 500 Index were up 0.4 percent at 982.60, after earlier reaching 986.40.
Economists’ Forecasts
Total starts were projected to rise to a 599,000 annual pace, after an initially reported 582,000 the prior month, according to the median forecast of 70 economists surveyed by Bloomberg News. Estimates ranged from 542,000 to 646,000, after a 582,000 pace initially reported for June.
Building permits, a sign of future construction, fell 1.8 percent in July to a 560,000 annual pace from 570,000.
Separately, a Labor Department report today showed wholesale prices in the U.S. fell more than forecast in July as energy costs receded. The 0.9 percent decrease in prices paid to factories, farmers and other producers followed a 1.8 percent gain in June, the Labor Department said. Excluding food and fuel, so-called core prices unexpectedly fell 0.1 percent.
Confidence among builders rose to a one-year high this month, a National Association of Home Builders/Wells Fargo index showed yesterday. The gauge climbed to 18, matching forecasts, from 17 the prior month. At the same time, a reading below 50 means most respondents view conditions as poor.
Multifamily
Work on multifamily homes, such as townhouses and apartment buildings, dropped 13 percent to an annual rate of 91,000. Multifamily projects are more vulnerable to credit constraints facing some builders.
The decrease in starts was led by a 16 percent drop in the Northeast, followed by a 1.6 percent decline in the West and 1.4 percent in the South. They rose 13 percent in the Midwest.
Toll Brothers Inc., the largest U.S. luxury homebuilder, reported third-quarter revenue that exceeded analysts’ estimates. New-home contracts rose over the year-earlier quarter for the first time since 2005, Horsham, Pennsylvania-based Toll said on Aug. 12.
“Although some of our markets are still stuck in the mud, many are improving,” Chairman and Chief Executive Officer Robert Toll said on a conference call. “It does feel as if the fence sitters are looking for reasons to jump in.”
Government Help
Government efforts to stoke the housing market have included offering lenders incentives to modify the terms of delinquent mortgages; Federal Reserve purchases of mortgage- backed securities to free up funding for home loans; and an $8,000 tax credit for first-time home buyers for transactions completed before Dec. 1.
Foreclosures remain a threat to builders. About $3.4 trillion worth of houses are at risk of default because the owners owe more than the property is worth, Santa Ana, California-based First American CoreLogic said last week.
Meanwhile, foreclosure-driven declines in prices are lifting sales. Homeowners cut asking prices by $27.8 billion in the year through Aug. 1, according to Trulia Inc., a San Francisco-based real estate data provider.
To contact the reporter on this story: Shobhana Chandra in Washington schandra1@bloomberg.net; Bob Willis in Washington bwillis@bloomberg.net
Last Updated: August 18, 2009 08:50 EDT
Aug. 18 (Bloomberg) -- Housing starts in the U.S. unexpectedly fell in July, pulled down by multifamily dwellings, while single-family starts which make up most of the industry rose to the highest level since October.
The 1 percent decline in starts to an annual rate of 581,000 was the first drop in three months and followed a 587,000 rate in June, the Commerce Department said today in Washington. Construction of single-family houses, which account for 75 percent of the industry, rose 1.7 percent to a 490,000 rate, today’s report showed.
Single-family home construction has been rising since March, a sign that falling home values and stimulus efforts such as a tax credit for first-time buyers are starting to reverse the housing meltdown that triggered the financial crisis. While the economy is forecast to grow this quarter, foreclosures, tight credit and job losses will temper the recovery.
“It’s still an indication that we’re at a turning point,” Jonathan Basile, an economist at Credit Suisse Holdings Inc. in New York, said before the report. “The housing recovery will look uneven until there’s more visibility in the economy.”
Stock-index futures pared gains after the report and Treasuries rose. The yield on the benchmark 10-year note fell to 3.50 percent at 8:43 a.m. in New York, from 3.52 percent earlier in the day. Futures on the Standard & Poor’s 500 Index were up 0.4 percent at 982.60, after earlier reaching 986.40.
Economists’ Forecasts
Total starts were projected to rise to a 599,000 annual pace, after an initially reported 582,000 the prior month, according to the median forecast of 70 economists surveyed by Bloomberg News. Estimates ranged from 542,000 to 646,000, after a 582,000 pace initially reported for June.
Building permits, a sign of future construction, fell 1.8 percent in July to a 560,000 annual pace from 570,000.
Separately, a Labor Department report today showed wholesale prices in the U.S. fell more than forecast in July as energy costs receded. The 0.9 percent decrease in prices paid to factories, farmers and other producers followed a 1.8 percent gain in June, the Labor Department said. Excluding food and fuel, so-called core prices unexpectedly fell 0.1 percent.
Confidence among builders rose to a one-year high this month, a National Association of Home Builders/Wells Fargo index showed yesterday. The gauge climbed to 18, matching forecasts, from 17 the prior month. At the same time, a reading below 50 means most respondents view conditions as poor.
Multifamily
Work on multifamily homes, such as townhouses and apartment buildings, dropped 13 percent to an annual rate of 91,000. Multifamily projects are more vulnerable to credit constraints facing some builders.
The decrease in starts was led by a 16 percent drop in the Northeast, followed by a 1.6 percent decline in the West and 1.4 percent in the South. They rose 13 percent in the Midwest.
Toll Brothers Inc., the largest U.S. luxury homebuilder, reported third-quarter revenue that exceeded analysts’ estimates. New-home contracts rose over the year-earlier quarter for the first time since 2005, Horsham, Pennsylvania-based Toll said on Aug. 12.
“Although some of our markets are still stuck in the mud, many are improving,” Chairman and Chief Executive Officer Robert Toll said on a conference call. “It does feel as if the fence sitters are looking for reasons to jump in.”
Government Help
Government efforts to stoke the housing market have included offering lenders incentives to modify the terms of delinquent mortgages; Federal Reserve purchases of mortgage- backed securities to free up funding for home loans; and an $8,000 tax credit for first-time home buyers for transactions completed before Dec. 1.
Foreclosures remain a threat to builders. About $3.4 trillion worth of houses are at risk of default because the owners owe more than the property is worth, Santa Ana, California-based First American CoreLogic said last week.
Meanwhile, foreclosure-driven declines in prices are lifting sales. Homeowners cut asking prices by $27.8 billion in the year through Aug. 1, according to Trulia Inc., a San Francisco-based real estate data provider.
To contact the reporter on this story: Shobhana Chandra in Washington schandra1@bloomberg.net; Bob Willis in Washington bwillis@bloomberg.net
Last Updated: August 18, 2009 08:50 EDT
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