In March building permits fell to a record low level and construction of new homes plummeted again following a February gain which raised hopes of recovery.
On Thursday the Commerce Department said construction of new homes and apartments dropped 10.8 percent last month to a seasonally adjusted annual rate of 510,000 units. It's the second-lowest rate since the 1940s. January's 488,000 pace remains the post-war low.
The decline was worse than economists had expected and February activity also was revised lower. That is more evidence that the steep slump in housing, which was a major factor triggering the current recession, has yet to run its course.
According to the report, building permit applications fell in March by 9 percent to an annual rate of 513,000 units. That was lower than the 550,000 rate that economists had expected. Permits for single-family homes fell 7.4% to a 361,000 annual rate, the second-lowest on record.
In April the mood of home builders improved, but however remained gloomy, according to reports from The National Association of Home Builders.
The government has cautioned that its monthly housing data is volatile and is subject to large sampling and other statistical errors. In most months, the government can't be sure whether housing construction increased or decreased. In March, for instance, the standard error for starts was plus or minus 11.6%. Large revisions are common.
It can take four months for a new trend in housing starts to emerge from the data. In the past four months, housing starts have averaged 532,000 annualized, down from 568,000 in the four months ending in February, according to MarketWatch reports.
The trade association said that despite being near to its historically low levels, the trade association said the index rose five points to 14, its highest reading since October.