Housing won't recover until inventory reduced: White House

WASHINGTON (Reuters) - The U.S. housing market will not recover until the inventory of unsold homes is reduced, the White House said on Tuesday after the government reported construction starts on new homes slumped to a record low.

“While it’s a very difficult time for those in the home construction business, we won’t see the housing sector recover until we reduce the inventory of unsold homes,” said White House spokesman Tony Fratto.

With the economy in a recession, he noted that the lower inflation data also released by the government was welcome news, especially the large drop in energy prices. The Labor Department said its closely watched Consumer Price Index dropped 1.7 percent.

“The significant drop in energy prices acts like a huge tax cut in our economy, so that’s welcome at this point,” Fratto said. “It gives families more cash to spend on other priorities.”

Reporting by Jeremy Pelofsky, Editing by Chizu Nomiyama