Guardian UK: US housebuilding at 10-year low

[marmar]

US housebuilding at 10-year low


Angela Balakrishnan
Thursday August 16, 2007
Guardian Unlimited


The pace of home construction in the US plummeted to a 10-year low in July while building permit activity - a sign of future construction plans - sank to the lowest in 11 years, government data showed today as analysts warned there was worse to come for the crumbling US housing market.
Figures from the Commerce Department dealt another blow to financial markets as it showed that home construction tumbled by a hefty 6.1%, setting an annual pace of just 1.381m units last month, much lower than Wall Street forecasts. This was lowest rate since January 1997.

Building permits dropped by 2.8% to an annual pace of 1.373m, their lowest since October 1996. Economists had predicted an easing to 1.4m.

Compared with a year earlier, July home starts were off 20.9%, while permits were down 22.6%.

"It looks like it is giving way to a new round of weakness," said Robert Brusca, economist at Fact and Opinion Economics. "The financial markets are much weaker than the real economy. This is a comeuppance for poor lending practices. If this continues, it will have a significant economic impact."

A breakdown of the figures showed that the south was the worst affected, with housing starts falling 11%. The west saw a drop of 1.3% while there was a decline of 1.3% in the north-east. The midwest however saw a rise of 2.6%. ......(more)

The complete piece is at: http://business.guardian.co.uk/story/0,,2150192,00.html