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Economy

Housing starts fall to lowest in 16 years

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Construction of single-family homes fell 5.5 percent, the eighth consecutive monthly decline.

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WASHINGTON - Housing construction nationally fell in November, with single-family activity dropping to the lowest in more than 16 years. Analysts said the recession in housing showed no signs of a turnaround.

The U.S. Commerce Department reported yesterday that construction of new homes and apartments dropped by 3.7 percent last month to a seasonally adjusted annual rate of 1.2 million units.

Construction of single-family homes fell by 5.5 percent to an annual rate of 829,000 units. The decline in single-family-home starts was the eighth consecutively, pushing activity to its lowest since April, 1991. Starts on apartments rose last month by 4.4 percent to an annual rate of 332,000 units.

In an ominous sign for future activity, the government reported that applications for building permits fell for a sixth straight month, dropping by 1.5 percent to a seasonally adjusted annual rate of 1.15 million units, the slowest pace for permits since June, 1993.

The situation in metro Toledo wasn't much different. Housing starts in Lucas County this year are far behind last year's.

Through November, county communities reported 414 housing starts, down from 658 for all of 2006, officials said. In 2005, the county had 800 starts.

Home building in Wood County also has cooled, to 273 starts through November this year, down from 379 for all of 2006, officials said.

The overall construction decline across the country left home building 24.2 percent below the level of activity a year ago. After five straight years of record sales and soaring prices, housing has been in a serious downturn for two years.

Analysts expect the weakness to intensify in coming months, possibly becoming enough of a drag to push the country into a full-blown recession.

"The housing recession continues to grind away," said Brian Bethune, an economist at Global Insight.

He said a downward spiral in sales is being exacerbated by the severe credit crunch and rising mortgage foreclosures which are dumping more homes on a glutted market.

A report yesterday added to evidence that housing is far from recovering as 2007 comes to a close.

The National Association of Home Builders/Wells Fargo confidence index held at a record low of 19 for a third month in December.

The downturn has intensified since a severe credit crunch erupted in August, drying up many sources of home loans and causing large banks and investment houses to declare billions of dollars of losses from the rising number of mortgage defaults.

The slump in housing is the worst since the early 1980s, and some economists believe that in terms of price declines it may become the worst since the Great Depression.

The new-housing report showed that construction activity was down in all regions of the country except the South, where it increased 0.3 percent. It declined 1.5 percent in the Midwest.

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