Home construction starts and permits for future building hit their lowest level in more than 14 years in September, the government said on Wednesday in a report showing how heavily the battered housing sector is weighing on the economy.
The Commerce Department said housing starts dropped 10.2 percent last month to an annual pace of 1.191 million units, the slowest pace since March 1993 and below the 1.285 million units expected by economists.
Building permits fell 7.3 percent, the sharpest decline since January 1995, to an annual rate of 1.226 million. Economists polled by Reuters had forecast September permits at 1.298 million after the 1.322 million rate of August.
The dollar fell on the news of low home starts and some analysts saw the figure as a troubling sign for the economy.
"If we hit 1.0 million start range, it's consistent with recessions in the past. And we are heading in that direction," said Kurt Karl, chief U.S. economist for Swiss RE of New York.