WASHINGTON (MarketWatch) - U.S. home builders started the fewest homes in nearly a decade in January, as housing starts plunged 14.3% to a seasonally adjusted annual rate of 1.408 million, the Commerce Department reported Friday.
It's the lowest rate for starts since August 1997. Housing starts were down 37.8% compared with January 2006.
Building permits dropped 2.8% to 1.568 million in January, 28.6% below the same month a year ago.
The starts figure was much lower than expected on Wall Street, where economists were looking for a 2% drop to 1.60 million annualized units. The permits figure was close to the 1.58 million expected by median forecast in the MarketWatch survey of economists.
The stunning drop in home building indicates that builders are scaling back their plans on a massive scale to work down the excess inventory of unsold homes on the market. Hopes that a bottom in the housing market has been reached will have to be re-evaluated
It's the lowest rate for starts since August 1997. Housing starts were down 37.8% compared with January 2006.
Building permits dropped 2.8% to 1.568 million in January, 28.6% below the same month a year ago.
The starts figure was much lower than expected on Wall Street, where economists were looking for a 2% drop to 1.60 million annualized units. The permits figure was close to the 1.58 million expected by median forecast in the MarketWatch survey of economists.
The stunning drop in home building indicates that builders are scaling back their plans on a massive scale to work down the excess inventory of unsold homes on the market. Hopes that a bottom in the housing market has been reached will have to be re-evaluated
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