WASHINGTON (Reuters) - Construction starts on new U.S. homes plummeted to a 17-1/2-year low during August as builders scaled back sharply to try to cope with the worst slump in U.S. housing since the Great Depression.

The Commerce Department reported on Wednesday that starts on new homes fell 6.2 percent to a seasonally adjusted annual rate of 895,000, their lowest since January 1991 and well below the 950,000 rate that Wall Street economists surveyed by Reuters had anticipated.

The August rate of starts on single-family homes was down 1.9 percent to 630,000, which also was the softest rate since the start of 1991.

Starts in August were a whopping 33 percent below the level a year earlier.

With home foreclosures soaring and prices falling, builders were clearly bracing for a protracted downturn. New applications for building permits declined 8.9 percent in August to an annual rate of 854,000.

It was the weakest rate for permits since February 1991 and was far below forecasts for a 930,000-unit rate. The rate of permit applications last month was 36 percent weaker than in August 2007.

(Reporting by Glenn Somerville, editing by Neil Stempleman)

  Add comment

Name:
E-Mail:
Comment:
Enter code: