New Home Builds at a 17-Year Low

Construction of new homes and apartments fell to its lowest level in 17 years in August, showing the country is still gripped by a severe housing downturn that has triggered billions of dollars of losses and is reshaping the structure of U.S. finance.

Housing construction dropped a surprising 6.2% last month to a seasonally adjusted annual rate of 895,000 units. That’s the slowest building pace since January 1991, another period when housing was going through a painful correction. The August drop reflected a 1.9% decline in single-family construction, which fell to an annual rate of 630,000 units. Construction of multifamily units fell by 15.1% to an annual rate of 265,000 units.

The housing downturn has depressed overall economic activity and pushed the country close to a recession. Thousands of construction jobs have been lost, contributing to an economic slowdown that has pushed the overall unemployment rate to a five-year high.

Those who can qualify for a mortgage (or have the cash to buy without a mortgage) are sitting pretty right now with the huge inventory of homes on the market just about everywhere. Mortgage rates continue to slide in light of the government’s huge bailout plan, and as a result, the combination of low rates and high inventory make now a cherry picker’s dream time for housing.

Talk to us if you’re considering a home. There may never be this great of a combined opportunity again.