New Single Family Construction at a 16 Year Low

New home construction in the US fell 3.7 percent in November putting construction of single family homes at the lowest level in more than 16 years.

With an eighth straight monthly drop in new single-family homes it’s estimated that 829,000 new homes were started this month which is the lowest since April 1991.  In addition to this already low number, permits for future building fell 1.5 percent to the lowest level since June 1993.

This data emphasizes how hard the housing sector slump has hit the economy. Michael Darda, chief economist at MKM Partners in Greenwhich, Conneticut, states that “The forth quarter … is going to have a substantial drag from the second leg down in construction, but the bright spot is that it’s unlikely that we’re going to see this rate of decline continue.”

While the decline in new constructions is bad for the economy, this decline was a necessary evil as this will help clear off some inventory of homes that remain on the market helping start the recovery.

To read more about single-family housing starts hit 16 year low head on over to Reuters.