New home construction saw a 22.5 percent decline in February from January. This decline came as a surprise to investors following a surge in apartment construction in January. This is just the latest evidence that the housing industry is still many years away from recovery. Only 479,000 were being built in February compared to the 600,000 in January according to the Commerce Department. This is the lowest level since April 2009 and the second-lowest in over a 50 years.
The main area of home construction, which is single-family homes, were down 11.8 percent in February. Construction of apartments and condominiums dropped 47%, taking out much of the gains in January. Building permits also fell 8.1 percent last month to the lowest levels since 1960.
Here’s a breakdown of the drop in home construction across the country.
Midwest – 48.6%
Northeast – 37.5%
West – 28%
The National Association of Home Builders said Tuesday that they have rated March a 17 on its index of industry sentiment. This is up from 16, where it has been for the past 5 months, but isn’t really good news though since any reading below 50 indicates negative sentiment about the housing industry’s future. The last time the index was above 50 was April 2006.