Home construction plunged last month to its lowest level in 16 years, as builders cut back and their lenders grew wary amid rising delinquent construction loans.<\/p>\n
Housing starts plunged 14.2% in December to a seasonally adjusted annual rate of 1.006 million, the slowest pace since 996,000 starts in May 1991. Permits, an indicator of future construction, tumbled 8.1% to a 1.068 million pace, the Commerce Department said.<\/p>\n
While builders have been scaling back for many months, some said the end of 2007 was the bleakest period yet in the slump, forcing them to make sharp cutbacks.<\/p>\n
“The last quarter was the most challenging environment since the downturn started in July 2005,” said Douglas Smith, president of Miller & Smith, a builder in McClean, Va., which sold 350 homes last year. “All of the ramifications from the mortgage meltdown really took hold.”<\/p>\n