US Construction Permits, Housing Starts Fall to Record Low Levels
The US Commerce Department reported on Wednesday that permits for residential construction plunged to a new record-low level in February. Permits fell to a seasonally adjusted annual rate of 517,000 for the month, down 8.2 percent from January's revised pace of 563,000, according to the report.
The pace is the lowest reported since officials began tracking the data back in 1959, and was well below the rate expected by analysts. The nation's continued high level of joblessness, combined with skyrocketing food and oil prices, are keeping many potential homebuyers waiting on the sidelines.
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"It's consumer nervousness," explained the National Association of Homebuilders' chief economist David Crowe. "It's a fragile recovery to begin with, and then you throw in high energy costs, new uncertainties about Congress, and it's just enough to spill over the glass again."
Crowe also said that builders rushed to secure permits in December and begin new construction in January before new zoning laws went into effect in February, but that it shouldn't have had that significant of an impact on February's permits. As it stands, both permits and housing starts are about 20 percent below levels of last year.
The drop in new home construction in February was also more severe than expected, with the measure falling at its fastest rate since March 1984. Housing starts, or the number of new residential construction projects started, fell 22.5 percent in February to an annual rate of 479,000 from a revised figure of 618,000 for January, the Commerce Department said. Economists had projected starts would fall to 545,000.
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