Business

U.S. housing starts plunge

American new home construction plunged in February, the U.S. Commerce Department reported Wednesday.
U.S. housing starts in February fell to their second-lowest level on records dating back more than a half-century. (CBC)

American new home construction plunged in February, the U.S. Commerce Department reported Wednesday.

Housing starts dropped by 22.5 per cent from January to a seasonally adjusted 479,000, the fewest homes in nearly two years.

It was the second-lowest number of starts on records dating back more than a half-century.

Builders also cut their applications for permits to start new projects to a five-decade low.

The decline in construction activity is the latest evidence that the U.S. housing industry is years away from a recovery.

The decline followed a surge in highly volatile apartment construction in January, which pushed the overall construction rate up to more than 600,000 units — the fastest rate in 20 months.

Still, the building pace has been far below the 1.2 million units a year that economists consider healthy.

Single-family homes, which make up roughly 80 per cent of home construction, fell 11.8 per cent in February. Apartment and condominium construction dropped 47 per cent, reversing much of January's gains.

Building permits, an indicator of future construction, fell 8.1 per cent last month to the lowest level on records dating back to 1960. Permit requests for single-family homes saw the biggest decline. Apartments and condos remained flat.

With files from The Associated Press

now