US housing starts fell by 14.2% in December, closing out a grim year in the property sector, the Commerce Department said today.
December housing starts fell to an annualised pace of 1.006 million properties, the weakest level since May 1991. The decline was far steeper than analysts' consensus forecast of 1.150 million units.
For the 2007 full-year, housing starts plunged by 24.8% from 2006, the steepest decline since 1980. Construction began on a total of 1.354 million homes.
December building permits fell by 8.1% to 1.068 million, their lowest level since March 1993. That was below forecasts of 1.140 million for the leading indicator, a further sign that the housing woes are set to continue in the coming months.
Building permits dropped by 25.2% to 1.376 million last year. That was the sharpest falloff in the gauge of future activity since 1980.
The report wrapped up a troubled 2007 in the US property market, hit by a crisis in sub-prime mortgages - home loans given to people with bad credit - and the collapse of a housing bubble in 2006.
The housing meltdown is considered an important threat to US economic growth, with some analysts saying the world's biggest economy is at an imminent risk of a recession.
A gloomy Federal Reserve report yesterday said the US economy's growth had abruptly slowed at the end of 2007 amid lacklustre holiday spending, weak manufacturing and the prolonged housing slump.
The Fed's Beige Book report, to be used at its January 29-30 policy meeting, however, did not point to a meltdown that might mean a recession. The Fed is widely expected to lower its base federal funds interest rate, currently pegged at 4.25%, by a half percentage point at the meeting to ward off recession risks.
