August Housing Construction Hits 17 Year Low

September 17, 2008 4:42 p.m. EST

Washington, DC (AHN) - The Commerce Department reported Wednesday that the construction of new homes in August fell 6.2 percent to an annually rate of 895,000 units, a pace not seen since January 1991.

With housing still battling through a sluggish market, analysts did expect a pullback in August. However, the end results was much worse then the 1.6 percent pullback that was expected.

Construction of multi-family units was hit hardest in August, falling 15.1 percent to an annual rate of 265,000 units. Single family homes held up a bit, with a modest 1.9 percent decline to an annual rate of 630,000 units.

The Northeast saw the biggest decline in construction activity, falling 14.5 percent. The Midwest declined 13.6 percent and the South dropped 7.4 percent. The West was the only region to avoid a decline in activity.

Year-over-year, new housing construction is down 33.1 percent as the housing sector continues to battle the effects of the U.S. mortgage meltdown which in turn as led to a tightening home lending market.