February housing starts near record low
Washington, DC, United States (AHN) – Construction of new homes in the United States reached near-record lows in February, dropping by 22.5 percent from January to 479,000 starts, according to the Commerce Department.
Analysts had expected a more robust 560,000 housing starts.
January’s figure was near the record low of 477,000 in April 2009 during the depths of the recession. Records only go back 50 years.
In addition, housing starts were down 20.8 percent from the same period a year earlier.
Housing starts were down across the nation.
Multifamily units took a larger hit than single-family homes, with building permits for multifamily housing units down 46.1 percent to 104,000 while permits for single-family homes were down by 11.8 percent to 375,000.
Weak demand was blamed for the drop in permits. Supply outstrips demand with a large number of foreclosed homes continuing to depress the market. In addition, tighter credit means home buyers have trouble qualifying for a mortgage to buy a home and home builders have trouble getting credit to finance building a home.
Nevertheless, the problems in the housing industry are further depressing the economy. Economists say that each new house built generates about $90,000 in taxes and adds three new jobs to the economy for a year.
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