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US home building at 17-year low US home building at 17-year low
(11 minutes later)
Construction of new US homes fell more than expected last month to reach its lowest level in almost 18 years, Commerce Department figures have shown.Construction of new US homes fell more than expected last month to reach its lowest level in almost 18 years, Commerce Department figures have shown.
The number of new houses and apartments being built in September declined 6.3% compared with the same month in 2007.The number of new houses and apartments being built in September declined 6.3% compared with the same month in 2007.
This fall was much more severe than the 1.6% dip that analysts had expected.This fall was much more severe than the 1.6% dip that analysts had expected.
As a result, 817,000 new homes were built across the country last month on a seasonally adjusted basis, the slowest pace since January, 1991. Analysts predict that housing construction will fall throughout 2009, and only grow again when the banking sector and wider economy recover.
The fall in the construction of one-room apartments was even more pronounced, falling 11% from a year earlier to 544,000, the lowest figure since August 1982. Until then, would-be new homeowners are finding that they either cannot afford to get their first mortgage, or that banks are reluctant to lend.
The report added that the downturn in construction was most notable in the north-east of the country. Without these would-be customers, homebuilders are cutting back on the number of new houses they build.
'Slide continuing''Slide continuing'
The report showed that 817,000 new homes were built across the country last month on a seasonally adjusted basis, the slowest pace since January, 1991.
The fall in the construction of one-room apartments was even more pronounced, falling 11% from a year earlier to 544,000, the lowest figure since August 1982.
The study added that the downturn in construction was most notable in the north-east of the country.
Mark Zandi, chief economist at Moody's Economy.com said the fall in construction was "a significant weight on the economy".Mark Zandi, chief economist at Moody's Economy.com said the fall in construction was "a significant weight on the economy".
"Not only is housing demand falling but builders can't get credit to build homes," he added. "Not only is housing demand falling, but builders can't get credit to build homes," he added.
"The slide in construction will continue into next year.""The slide in construction will continue into next year."
Fellow analysts said the situation will only improve when both the housing market and the wider economy recover.