WASHINGTON - Housing construction lost momentum in October, plunging by 11.4 percent, the biggest drop since 1994.
But even with the sharp decline - which came after the level of housing construction shot up to a 16-year high in September - the number of housing units for which builders broke ground in October was still considered to be in the healthy zone.
Housing construction in the Augusta-Aiken area appears to be unaffected by the past year's economic downturn. At the end of October, year-to-date permits for new single-family home construction in Richmond, Columbia and Aiken counties totaled 1,745, a 3.4 percent increase from the 1,687 permits issued during the same period in 2001.
In Wednesday's national report, construction of new single-family homes fell 7 percent in October to a rate of 1.35 million. Work on apartments, condominiums and other multifamily housing plummeted by 31.4 percent to a rate of 221,000 last month.
Builders began work on 1.60 million housing units, at a seasonally adjusted annual rate, representing a 11.4 percent decline in October from the previous month, the Commerce Department reported Wednesday.
While October's housing activity level was weaker than analysts were expecting, economists predicted September's red-hot pace could not be sustained. Housing construction jumped by 11 percent in September to a rate of 1.81 million units, the highest level since December 1986.
The 11.4 percent drop in housing construction in October marked the biggest decline since January 1994. The 1.60 million rate of housing units under way was the lowest level since April.
"The good news is that the level of housing activity is still very strong, but the bad news is housing construction is probably maxed out in terms of how much it will contribute to economic growth," said Ken Mayland, the president of ClearView Economics.
Even with the slowdown in construction in October, the housing market remains in good shape. Stoked by low mortgage rates, home sales are expected to post records this year.
Staff reports were used in this article.