Housing construction plunged to its lowest level in more than six years in October as the nation's formerly strong housing market slowed further. The Commerce Department reported Friday that construction of new single-family homes and apartments dropped to an annual rate of 1.486 million units last month, down a sharp 14.6 percent from the previous month. The decline was bigger than expected and represents the largest percentage fall in 19 months, pushing total activity down to the lowest level since July 2000. Applications for new building permits, seen as an indicator of future construction levels, fell for an eighth consecutive month, declining 6.3 percent to an annual rate of 1.535 million units. The housing weakness contributed to the loss of a full percentage point from economic growth in the July-September quarter, when the economy expanded at a slow1.6 percent rate. Housing is expected to continue pulling economic growth down over the next year but analysts believe the adverse effects of falling sales and construction cutbacks will not be enough to pull the country into a recession. Despite the low levels, there were signs that the decline is beginning to level off, with the monthly survey of builder sentiment edging up slightly in early November following another small increase in October. It marked the first back-to-back improvements in builder sentiment since June 2005. cline since March 1991. Construction of single-family homes fell by 15.9 percent in October from the seasonally adjusted September level, dropping to an annual rate of 1.177 million units. Construction of multi-family units dropped by 9.1 percent to an annual rate of 309,000 units. The drop in construction was led by a 26.4 percent decline in the South. Construction fell by 11.7 percent in the Midwest and was down 2.1 percent in the West. The only region showing strength was the Northeast, where construction jumped by 31 percent.
