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US home construction collapsed 22.3% in March

Construction continues at a housing plan on March 18 in Zelienople, Pennsylvania. Spending on U.S. construction projects fell 1.3% in February. The Commerce Department said the February decline followed a 2.8% rise in construction in January. (AP Photo/Keith Srakocic)

Construction continues at a housing plan on March 18 in Zelienople, Pennsylvania. U.S. home building collapsed in March as the coronavirus spread and housing starts tumbled by 22.3% from a month ago. (AP Photo/Keith Srakocic)

By JOSH BOAK
Economics Writer

The Associated Press (AP) — U.S. home building collapsed in March as the coronavirus spread and housing starts tumbled by 22.3% from a month ago.

The Commerce Department said Thursday that ground breakings occurred last month at a seasonally adjusted annual rate of 1.2 million units, down from a pace of 1.56 million in February. The construction of single-family houses fell 17.5%, and apartment and condo starts were off 32.1% from a month ago.

All of this paints a bleak outlook for housing as the lockdown to contain COVID-19 has resulted in more than 20 million Americans losing their jobs in the past four weeks.

There was a 6.1% decline in the completion of homes being constructed, which means many homes are being left half built. The drop was 15% for single-family houses, meaning that unless economic activity picks up soon there could be ghost towns of half-built housing developments, an occurrence last seen following the 2008 recession.

Construction activity will most likely continue to slow. There was also a 6.8% drop in permits to begin construction in March.

Homebuilders have become anxious. A confidence index released Wednesday by The National Association of Home Builders and Wells Fargo plunged 42 points in April to a reading of 30, the largest single monthly change in the history of the index. Any reading below 50 signals a decline.

Copyright 2020 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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