U.S. housing starts slid 1.3% in October, to 1.55 million units. ItÕs a relatively strong result, with both single and multi-unit starts holding relatively stable, says BMO Nesbitt Burns. The number beat analyst estimates.

“However, building permits were weaker than expected, falling 3.6% to a four-year low of 1.47 million units in the month. These declines indicate that the Federal Reserve’s ten rate cuts so far this year are battling heavily with the downward pull of weaker employment and sliding confidence,” says BMO.

“We may be in the minority in believing that more Fed rate cuts are on the horizon, which will be needed to help borrowing costs stay low. Without such a sustained period of lower mortgage rates, the housing market is expected to continue to slow along with the rest of the economy.”

BMO says that, given the softening trend in permits and the recent slide in the NAHB index, U.S. housing starts are expected to continue eroding over the next few months, even with the recent lows in mortgage rates.