US stock markets started lower on Wednesday as a drop in new home construction once again raised concerns that the fragile economic recovery might stall, and the federal government ordered Fannie Mae and Freddie Mac to delist from the NYSE.
Bloomberg reported figures from the Department of Commerce, saying that housing starts fell to an annual rate of 593,000 last month, down 10 percent and the lowest level this year.
Building permits also declined dramatically.
Housing prices and construction rates, the stratospheric rise of which drove the sub-prime mortgage bubble, have become of intense concern to stock market and futures traders on both Wall Street and Main Street.
Both Fannie Mae and Freddie Mac saw heavy losses in their share value, as regulators at the Federal Housing Financing Agency (FHFA) ordered them to delist from the New York Stock Exchange. The FHFA said that neither company’s shares command a sufficiently high minimum price to meet the standards of the NYSE.
Stock index futures are likely to suffer today – and possibly in the long term as well – as a result of this confluence of bad news. Although declines in housing investment were not unexpected, due to the expiration of federal tax incentives, they will still weigh on many sectors of the economy, including construction and commodities.
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