U.S. home construction plunged in October to its lowest level in more than six years, according to government data, sending a chill through the slumping housing market.
The Commerce Department reported today that construction of homes and apartments dropped to an annual rate of 1.486 million units last month, down 14.6 percent from the September level.
The sharpest drop came in the South, where construction fell by 26.4 percent. That region includes the Washington area.
Construction was down 11.7 percent in the Midwest and 2.1 percent in the West. The only region to show gains was the Northeast, where construction grew by 31 percent.
Fortunately for Oregon there's not much change in the west, and things look really good in the Northeast, but this is not promising. Home construction declines and I think we see big repercussions throughout the rest of the economy. Certainly when I talk to econ professors at Linfield housing prices get cited as a reason that we're probably heading towards a recession. Now that the popping of the housing bubble seems to be materializing in a decline in home construction I think the picture looks ugly. Looks to me like we might be headed for a big downturn just as the Democratic congress is sworn in. Which will be precisely the time that we want to deficit spend. But thanks to Bush's love affair with tax cuts, and his lunatic war we're already running huge deficits. I think the Democratic Congress has its work cut out for it, hopefully this can be managed, but its going to be tough. Getting out of Iraq I think would help a ton just by freeing up a lot of money. That's my amature prognosis, if you've got a good reason why I'm wrong please weigh in, since I'm a political science person, not an economics person.