Some housing news from Wall Street and Washington. The Commerce Department. "Privately-owned housing starts in September were at a seasonally adjusted annual rate of 1,772,000. This is 5.9 percent above the revised August estimate of 1,674,000, but is 17.9 percent below the September 2005 rate of 2,158,000."

"Privately-owned housing units authorized by building permits in September were at a seasonally adjusted annual rate of 1,619,000. This is 6.3 percent below the revised August rate of 1,727,000 and is 27.7 percent below the September 2005 estimate of 2,240,000. Single-family authorizations in September were at a rate of 1,207,000; this is 6.0 percent below the August figure of 1,284,000."

""Single-family housing starts in September were at a rate of 1,426,000; this is 4.3 percent above the August figure of 1,367,000."

"The rate of single-family housing starts dropped 20.3 percent in September compared to September 2005."

"The Census Bureau and HUD noted that month-to-month changes in seasonally adjusted statistics can show irregular movements. It may take four months to establish an underlying trend for building permit authorizations, five months for total starts, and six months for total completions, the agencies noted."

From CNN Money. "The disconnect between the two numbers surprised David Seiders, chief economist with the National Association of Home Builders, who said builders seemed to be working through a backlog of home permits they held for properties where they had not started construction."

"Seiders said that a pick-up in building is not necessarily a positive for the market, which has seen the inventory of completed but unsold homes increase to record levels, pushing down prices and forcing builders to offer incentives to sell homes."

"'If both permits and starts were up I'd be scared because I think there are still inventory issues that we need to work through,' he said. 'I hope the bounce in starts is a temporary phenomenon. I think it's inevitable that starts will be down in October.'"

From Bloomberg. "Starts increased 14 percent in the South to 975,000 and rose 3.4 percent in the Midwest to 270,000. Starts fell 14.1 percent in the Northeast to 134,000 and decreased 2.2 percent in the West to 393,000."

"The number of homes under construction fell 1.2 percent in September to a 1.328 million pace. Housing completions rose 11.1 percent to an annual rate of 2.084 million. The number of housing units authorized, but not yet started, decreased 11.1 percent to 202,600."

"More than half of U.S. homebuilders, 55 percent, are offering extras to entice buyers, up from 37 percent a year earlier, said Gopal Ahluwalia, at the National Association of Home Builders in Washington. Four percent are giving away cars, he said."

"Toll Brothers reported a 19 percent drop in fiscal third-quarter profit, its first decline in four years. 'There's no doubt that real estate is down but certain markets are doing well,' CEO Robert Toll said. 'I can't say that the worst is behind us and I can't say that it's not.''

US News and World Report. "To be sure, some the nation's largest home builders have recently complained of a flood of canceled orders. As inventories of unsold homes have reached record levels, many announced that they are writing down investments on land, stopped building, and laid off both administrative and construction workers."

"Meanwhile, the inventory glut has also pushed down prices for building materials, which have slumped by as much as 32 percent from a year ago. As a result, lumber mills from Maine to Washington State have announced that they are shutting down."

From Inman News. "After eight consecutive monthly declines, the National Association of Home Builders/Wells Fargo Housing Market Index gained one point in October, a level of 31. A score over 50 indicates that more builders view sales conditions as good than poor, and the reverse is true for scores below 50, the builders group reported this week."

"David Pressly, NAHB president said, 'More than three out of four builders are offering substantial sales incentives to move their product and limit cancellations, and this aggressive strategy is working.'"

"Comptroller of the Currency John C. Dugan told members of the American Bankers Association that a recent underwriting survey showed a 'significant easing' in residential mortgage lending standards."

"The survey showed lenders are doing the opposite of what regulators would expect them to do in a cooling housing market: allow longer interest-only periods, more piggyback loans, higher loan-to-value ratios, and more reduced-documentation loans."

"'Frankly, that concerns me,' Dugan said. 'We don’t want to see the lending decisions bankers make today result in excessive foreclosures, and reduced affordable housing credit, tomorrow.'"

From Lew Sichelman "A lack of enforcement at the state level is a major reason appraisals remain at the root of mortgage fraud, said panelists at a symposium sponsored by the Appraisal Foundation earlier this month."

"During an 18-month period between 2001 and 2002, Fannie Mae referred 860 cases to state regulators. Of those, some action was taken in 391. But as of this month, nothing has been done regarding the remaining 469 cases."

"A recent Appraisal Institute study found that more than half its members felt pressured to overstate their valuations. And the over-riding reason they go along, said attorney Rachel Dollar, is to keep from being blackballed by brokers, lenders and realty agents."

"AI president Richard Power said, only four states, Utah, Michigan, North Carolina and Arkansas, have made it illegal to coerce appraisers into making false valuations. And while 33 states require licensing, there are 'a lot of holes' in many of the regulations."