New home construction fell to the lowest pace in July than in 10 years, according to the U.S. Commerce Department.
The construction of new homes and apartments fell by 6.1 percent in July versus June to an annual rate of 1.38 million units. That was down 20.9 percent from a year ago.
“Declining starts and permits clearly reflect deepening problems in the mortgage markets, which erupted earlier this year in the subprime sector and now have spilled over into other components of mortgage finance," says David Seiders, chief economist for the National Association of Home Builders.
Other analysts predicted that things would get worse before they get better. "As bad as July's numbers were, they are bound to get worse in the next one to three months because of the turmoil in financial markets today," says Patrick Newport, chief U.S. economist for Global Insight.
Source: Associated Press, Martin Crutsinger (08/16/07)
