Construction of new homes in the US fell to the lowest level in more than a decade last month as builders continued to struggle with the steepest housing slump since 1991.
The US Commerce Department reported yesterday that construction of new homes and apartments dropped 6.1 percent last month to a seasonally adjusted annual rate of 1.38 million units. That was down 20.9 percent from the pace of activity a year ago and represented the slowest pace since January 1997.
The housing industry, which had enjoyed a prolonged boom until last year, has been struggling this year with a deepening slump as builders are slashing prices and throwing in various incentives in an effort to unload record levels of unsold homes.
The problems have been worsened by rising home foreclosures, especially in the subprime market, a development which is dumping even more homes onto the glutted market.
In other economic news, the US Labor Department reported that the number of newly laid off workers filing for unemployment benefits rose by 6,000 last week to 322,000.
The increase was unexpected. Analysts had been looking for a decline of around 1,000.
Applications for building permits, considered a good barometer of future activity, fell by 2.8 percent last month to an annual rate of 1.373 million units.
The current housing slump is the worst since a downturn that occurred during an economic recession in 1990 and 1991.
Overall economic growth has slowed but so far there has been no recession as other sectors have offset the weakness in housing.