The U.S. housing downturn continues to worsen, with construction of new homes and apartments falling in August to the lowest level in 17 years, the U.S. Commerce Department has reported.
Housing construction dropped 6.2 per cent to a seasonally adjusted annual rate of 895,000 units. The size of the drop surprised analysts, who had forecast a decline of just 1.6 per cent.
The August figures represent the slowest building pace since January 1991, when housing was also going through a painful correction. Thousands of construction jobs have been lost, helping push the overall unemployment rate to a five-year high of 6.1 per cent.
Building permits, which are considered a good indicator of future activity, dropped 8.9 per cent in August to an annual rate of 854,000 units.
Even before the mismanagement and corruption of the Bush Administration had succeeded in destroying one of the healthiest sectors in the U.S. economy, remodeling and renovations had surpassed new construction in revenue for contractors.
Now that I’m retired, I needn’t stay on top of monthly figures other than economic trends like this one. But, my friends who are struggling to make a buck as contractors or subs – are running as fast as they can to build and extend market share on repairing and renovating what families already own.