Colder than normal temperatures in the South stalled housing construction and as the Fed meets to determine monetary policy on Wednesday. Shartia Brantley reports.
TV AND WEB RESTRICTIONS~*NONE* In real estate it's all about location, location, location and so in November cold weather in the South dragged down overall housing starts. Chris Rupkey, Chief Financial Economist at Bank of Tokyo-Mitsubishi. SOUNDBITE: CHRIS RUPKEY, CHIEF FINANCIAL ECONOMIST, BANK OF TOKYO-MITSUBISHI (ENGLISH) SAYING: "The South is always the biggest - building goes on down there almost - 50 percent of the housing starts in the country are built in the South -- anyway it was a very cold November maybe that affected the South more than other areas of the country because the South is where the decline came down 19.5 percent housing starts in the South. Where every other region the other three regions were all up." Despite the decline in starts the overall market is improving and investors may need to shift their expectations on growth SOUNDBITE: CHRIS RUPKEY, CHIEF FINANCIAL ECONOMIST, BANK OF TOKYO-MITSUBISHI (ENGLISH) SAYING: "Well during the housing bubble we built 2 million homes per year we're not going to get back there anytime soon but you're right we're holding above 1 million and that's a good sign." Stagnant wages and lack of homebuying by Millennials are developing headwinds for the housing market especially in more expensive regions of the country. Even with these obstacles, and the collapsing rouble in Russia and the selloff in oil, a number of economist still see the Fed starting to raise rates in 2015. SOUNDBITE: CHRIS RUPKEY, CHIEF FINANCIAL ECONOMIST, BANK OF TOKYO-MITSUBISHI (ENGLISH) SAYING: "I've been looking for higher rates since each of the last three years and they find another reason not to normalize policy. Yeah, I'm thinking March my recommendation would be December I think we're close enough to full employment right now that they need to go auto sales are back at 17 million what's the hold up it's been six years that they have not tried to normalize rates" And when the Fed concludes its final meeting of the year on Wednesday, investors and markets will have a better idea on when rates will finally start to go up.