Residential Construction Hits 17-year Low

September 17th, 2008 by Jake

Construction of single-family homes and condominiums fell to its lowest level in 17 years in August. The U.S. Commerce Department reported today that construction of new single-family and multi-family units fell by 6.2 percent from the same period last year.

The August data gives an annual adjusted rate of just 895,000 new units, the fewest number of units to be built in a year in 17 years. Analysts had expected a less than 2 percent drop in construction of residential units nationwide, and the news is sure to quiet those looking for a rebound in the real estate market in the short term. When looking at just condominium and apartment units, the drop was even more pronounced. Construction of multi-family units fell by just over 15 percent in August.

The Midwest region was also hard hit by the drop in new residential construction. The region saw a drop in activity of 13.6 percent in August. Only the Northeast saw a larger decline during the month, with new construction activity down 14.5 percent. There doesn’t seem to be any relief coming for the battered real estate industry. The number of new building permits issued during August also fell nearly 9 percent. Construction continues, however, on many new projects on the North Shore Chicago Real Estate market.

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