The Commerce Department's July report on new residential construction is out today, and it shows that the pace of new home building dropped nearly 21 percent from the year-ago pace. From the Associated Press:
The Commerce Department reported Thursday that construction of new homes and apartments dropped 6.1 percent last month to a seasonally adjusted annual rate of 1.38 million units. That was down 20.9 percent from the pace of activity a year ago and represented the slowest pace since January 1997 ... The July drop in housing construction followed a 2.1 percent rise in June, which had been driven by a big increase in apartment building. Applications for building permits, considered a good barometer of future activity, fell by 2.8 percent in July to an annual rate of 1.373 million units. Housing construction fell in all parts of the country except the Midwest which posted a 2.6 percent increase in July. Construction starts were down 11 percent in the South, 3.7 percent in the West and 1.3 percent in the Northeast.
If you're into in-depth analysis of this report, be sure to check out Calculated Risk today -- the assessment there is that starts are still too high, along with residential construction employment. On a related note, the NAHB said yesterday that builder confidence has reached its lowest levels since early 1991, reflecting some of numbers mentioned above.