Home construction drops by 14.3% in January

WASHINGTON (AP) -- Housing construction plunged to the lowest level in nearly a decade last month as the housing industry continued to struggle with a severe slowdown.
Meanwhile, wholesale prices dropped by 0.6 percent in January, the biggest amount in three months, providing fresh evidence that inflation pressures are easing.
Construction of new homes and apartments plunged by 14.3 percent in January, pushing total activity down to a seasonally adjusted annual rate of 1.408 million units, the Commerce Department reported Friday.
The decline pushed activity to the slowest pace since August 1997 with construction in January 37.8 percent below the pace of a year ago. The steep decline last month followed two months of construction increases which had raised hopes that perhaps the worst of the housing slump was over.
The weather was blamed for part of the setback. November and December had been unusually mild while more normal winter weather returned to much of the country in January, depressing building activity.
However, economists said the depth of the decline showed that housing was still facing major problems after a five-year boom that ended last year with falling construction and declining sales of both new and existing homes.