Home Building Starts Hit 17-Year Low

Washington, DC, Aug. 19, 2008--U.S. home building starts in July fell 11 percent to the lowest annual rate in more than 17 years, while building permits plunged 17.7 percent, according to the Commerce Department.

The annual pace of housing starts at 965,000 narrowly beat Wall Street's expectations of 960,000, but it was the lowest since a 921,000 unit rate in March 1991. In June, housing starts rose 10.4 percent, revised up from the previously reported 9.1 percent.

Building permits, an indicator of future construction, dropped to an annual rate of 937,000, well below the 970,000 analysts had forecast.

The magnitude of the drop in permits was the biggest since a plunge of almost 24 percent in February 1990, while the number was the lowest since March this year, when they were 932,000.

Single family homes, which constitute the bulk of new housing, were especially weak. The annual unit rate of 641,000 single family homes started in July was the lowest since January 1991, when they were 604,000. Building permits were 584,000, the lowest since 523,000 in August 1982.