US housing construction takes 27-year plunge

0 Comments | AFP, January, 2008

WASHINGTON (AFP) — The US homebuilding sector in 2007 collapsed in the sharpest decline in 27 years amid a persistent real-estate slump and tightened credit that has stoked fears of recession, government data showed Thursday.

Capping a grim year in the housing sector, housing starts fell by 14.2 percent in December to an annualized pace of 1.006 million privately owned properties, the Commerce Department said.

It was the weakest level since May 1991, and far below analysts' forecast of 1.150 million units. A whopping 41.1 percent decline in starts for five or more unit buildings was the key factor in the collapse.

Construction permits, a gauge of future activity, fell by 8.1 percent in December to 1.068 million, their lowest level since March 1993. That fell...