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Housing construction plunged to the second
lowest level on record in March, providing a sobering sign that the
worst housing slump in decades has not yet ended.


      The Commerce Department said Thursday construction of new homes
and apartments dropped by 10.8 percent last month to a seasonally
adjusted annual rate of 510,000 units. That was the second lowest
construction pace on records that go back 50 years.


      The decline was worse than economists had expected and February
activity was revised lower as well. That is more evidence that the
steep slump in housing, which was a major factor triggering the
current recession, has yet to run its course.


      The Commerce report showed that applications for building
permits, considered a good barometer of future activity, also fell
in March, dropping 9 percent to an annual rate of 513,000 units.
That was lower than the 550,000 rate that economists had been
expecting.


      The drop in construction in March followed a 17.2 percent surge
in February, an unexpected gain that was driven by a big increase
in apartment activity, a sector that can be volatile from month to
month.


      For March, construction of multi-family unites fell by 29
percent following a 62.1 percent rise in February.


      Single-family construction was flat in March after a small 0.6
percent rise in February, a development that could be viewed as an
encouraging sign that this key part of home building may have
started to stabilize, but at a very low level.


      The 510,000 unit pace for total construction is the second
lowest on government records going back to January 1959. The record
low was a 488,000 unit pace set in January.


      For March, the biggest decline was an 8.5 percent drop in
activity in the Midwest, followed by a 5.5 percent decline in the
Northeast. Home construction posted a 4.1 percent rise in the West
and a 1.2 percent increase in the South.


      The setback in housing starts came after several more upbeat
reports showing tentative rebounds in sales and builder sentiment.


      The National Associaton of Home Builders reported Wednesday that
its guage of builder sentiment posted its biggest one-month jump in
five years in April.


      While still near historically low levels, the trade association
said the index rose five points to 14, its highest reading since
October. The trade group includes industry heavyweights such as
Centex Corp. and Lennar Corp., as well as hundreds of smaller
builders nationwide.

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Business and Economic News

The government says housing construction
plunged to the second lowest level on record in March, providing a
sobering sign that the worst housing slump in decades has not yet
ended.

New Home Construction Falls Lower Than Expected Du

March housing construction falls 10.8 percent

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