New American house construction falls to second lowest level in over 50 years
HOMEBUILDING in the US recorded its second lowest rate in over half a century last year, according to data released by the commerce department yesterday.
New house starts totalled 587,600, only a small improvement on the 554,000 begun in 2009 – the two worst years since records began in 1959.
December saw a 4.3 per cent fall, with new housing starts, since the same time the previous year, standing at 529,000.
“Low construction activity for an extended period is necessary to purge excess supply from the housing market,” commented ING’s Teunis Brosens.
Weak demand in the US housing market, as well as the excess supply, suggest that new house construction will remain sluggish in the coming months.
“We therefore expect a very slow and soft construction recovery,” Brosens warned.
Financial markets had a muted reaction to the figures, although gold prices hit a session high following their release.