Washington: Construction of new homes in the US plunged 11% in July to an annualized pace of 965,000 units, after an unexpected increase in June, the Commerce Department reported Tuesday.
The number was slightly higher than analysts’ consensus forecast of 960,000 units, but the rate of new construction was the weakest since March 1991, and the decline was the sharpest since December 2007.
Forward-looking construction permits dived 17.7% to 937,000, far below the 959,000 analysts expected. The drop was the steepest since February 1990.
Analysts expected a sharp drop in the July numbers after an unexpected rise in June which they attributed to a change in New York City construction code that took effect on 1 July, prompting many builders to start construction ahead of the deadline.
Economists are closely monitoring the forward-looking data for signs of recovery in the worst housing slump in decades.