Construction of new homes in the US fell in July to a 10-year low.
New home construction plunged 6.1% in July from June to an annualised 1.381 million units, the slowest pace since January 1997.
The performance fell short of the forecast of most analysts of 1.405 million units and shows home builders are scaling back activity.
Permits for new construction also dropped, by 2.8% to 1.373 million units, below Wall Street forecasts of 1.400 million.
The number of permits last month was the lowest since October 1996.
The grim data was expected to heighten the anxiety of investors worrying about the persistent slump in the US housing market and how far the crisis in the sub-prime mortgage sector extends into the broader economy.
On a 12-month basis, new housing starts tumbled 20.9% in July and construction permits were down 22.6%.
