Home Construction Decline in 2007 Near Record

Washington, DC, January 17, 2008– Construction of new homes last year fell by the largest amount in 27 years, according to the Commerce Department.

Construction began on 1.353 million new homes and apartments last year, down 24.8 percent from 2006. That number was the highest since a 26 percent decline in 1980.

It’s just one more sign that the housing slump may be pushing the economy into a recession. It’s not clear how a talked-about fiscal stimulus package might make a difference.

December’s decline, to an annual rate of 1 million units, was bigger than economists were expecting and indicated weakness in all parts of the country.

Applications for building permits also fell by 8.1 percent to an annual rate of 1.068 million units, and that was the seventh consecutive monthly decline.

Many experts believe the housing industry may not begin to turn around until next year.