Economy Watch: Housing Starts See Modest Rise in March
Housing starts experienced an unexpected uptick in March; unemployment dropped in two-thirds of U.S. states; and a jury finds Lee Farkas guilty of multiple counts of bank fraud.
By Dees Stribling, Contributing Editor
Housing starts experienced an unexpected uptick in March, according to the U.S. Census Bureau on Tuesday. The annualized rate for home starts during March was 549,000, an increase of 7.2 percent from February, when starts were at a record low. The bureau revised February’s total starts upward to 512,000 from 479,000, but that was still the lowest rate since April 2009.
Both single-family and multifamily starts were up in March. Starts on single-family homes were up 7.7 percent month-over-month, while starts on multifamily properties edged upward by 5.8 percent. Building permits, a gauge of future homebuilding, rose 11 percent to a 594,000 annualized rate.
What accounted for the modest rises? The same fundamental problems are still in place for the market: high unemployment in a lot of places, tight credit and foreclosed properties attracting buyers who might otherwise be in the market for a new house. On the other hand, the weather was better in March than February, so that might have had something to do with it.
Unemployment drops in most states
The U.S. Department of Labor reported on Tuesday that unemployment in two-thirds of the states dropped in March compared with February. That’s the largest number of states to see such a drop since June 2010, just before the economic recovery last year stalled.
Only a few states still have official unemployment rates over 10 percent, including California (12 percnet); Florida (11.1 percent); Kentucky (10.2 percent); Michigan (10.3 percent); Mississippi (10.2 percent); and Nevada (13.2 percent, still an unfortunate no. 1). Georgia and Oregon’s rates are exactly 10 percent. The lowest rates in the nation as of March were in the Dakotas–N.D. at 3.6 percent and S.D. at 4.9 percent.
Some states have made fairly remarkable dents in their unemployment rates since this time last year. Illinois has dropped from 11 percent to 8.8 percent from March 2010 to March 2011, for instance, while North Carolina dropped from 11.3 percent to 9.7 percent. A few other places were up year-over-year, such as Colorado 9 percent to 9.2 percent; and Louisiana, 7.2 percent to 8.1 percent, after suffering from the BP oil spill.
Mortgage crook Farkas sent up the river
A jury has found Lee Farkas, former chairman of Taylor, Bean & Whitaker Mortgage Corp., guilty on 14 counts of conspiracy and bank-, wire- and securities fraud, or pretty much everything the prosecution threw at him in the $3 billion bank fraud case. Farkas will be sentenced on July 1, and faces a maximum of 30 years for conspiracy and bank fraud and 20 years or more for wire and securities fraud.
Besides masking losses at his company through accounting smoke and mirrors, Farkas oversaw an elaborate scheme (nicknamed “Plan B,” according to prosecutors) to sell securities backed by mortgages that didn’t exist, among other financial shenanigans. He also diverted company money to buy himself expensive toys, such as a 1929 Ford Model A and 1963 Rolls Royce.
Wall Street bounced back on Tuesday from its Standard & Poor’s U.S. debt rating scare, with the Dow Jones Industrial Average rising 65.16 points, or 0.53 percent. The S&P 500 was up 0.57 percent, and the Nasdaq gained 0.35 percent.