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WASHINGTON: Construction starts on new US homes and housing building permits fell to record lows in October as the prolonged slump in the real-estate sector deepened, government data showed on Wednesday.
Housing starts dropped 4.5 percent to an annualised rate of 791,000 units, the Commerce Department said, the lowest level since it began publishing the data in January 1959.
On a 12-month basis housing starts were down a whopping 38.8 percent despite government efforts to revive credit flows and stem a rising tide of foreclosures in the wake of the collapse of the housing market in mid-2006.
US officials say that correcting the economy's current downturn requires a recovery in the huge housing market.
The record monthly decline was not as steep as analysts' consensus forecast of a drop to a rate of 780,000 units amid an accelerating global financial crisis that has seized up credit markets.
Permits to build new homes, an indicator of future activity, dropped 12.0 percent to a pace of 708,000, the lowest level since that data was first published in January 1960, and were down 40.1 percent from October 2007.
The department revised upward the September housing starts rate to 828,000 from a prior estimate of 817,000, and permits to 805,000 from 786,000.
Permits for construction of new single-family homes, a key market indicator, plunged 14.5 percent in October.
"This report is a shocker," said Patrick Newport, analyst at IHS Global Insight, predicting single-family housing starts would post double-digit declines in both November and December.
"When will starts turn around? If financial conditions improve, most likely about the middle of next year. But between now and then, starts are almost certain to drop another 20 percent," he added. - AFP/de
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