Housing starts fell 10 percent last month, the fifth time in six months the figure has fallen. Credit Federal Reserve Chairman Alan Greenspan and rising interest rates.
And Greenspan, giving Congress its twice-yearly update on monetary policy, warned the central bank may not be through raising rates, which this year already have been pushed higher four times.
Even Laura D’Andrea Tyson, President Clinton’s top economic adviser, said the White House wouldn’t object to another quarter-point increase in short-term rates before the end of the year.
The jawboning was part of a concerted effort to break the free fall of the dollar on world markets.
But it’s also tough talk that’s bound to cause potential buyers to think twice before committing to buy a new home.
Experts say that as housing starts are pushed down, demand for new appliances and furniture, at a high level for more than 18 months, also declines.
