Links
Home construction sinks, building permits down
Home construction plunged last month to the lowest level since December and building permits also fell, the latest signs that the construction industry won't fuel the economic recovery.
Builders are scaling back now that government incentives have expired.
The Commerce Department said Wednesday that construction of new homes and apartments fell 10 percent in May to a seasonally adjusted annual rate of 593,000. April's figure was revised downward to 659,000.
The results were driven by a 17 percent decline in the single-family market, which had benefited earlier in the year from federal tax credits of up to $8,000. It was the largest monthly drop in single-family construction since January 1991.
Applications for new building permits, a sign of future activity, also fell. They sank 5.9 percent to an annual rate of 574,000, the lowest level in a year.