Residential construction in Modesto, California (Scott Blake/Unsplash)

Sectors

New home starts plunge 30% in US

22 May 2020 | By GCR Staff | 1 Comment

US residential construction starts fell to the lowest level in five years last month owing to the coronavirus pandemic.

The Commerce Department said Tuesday, 19 May that the number of groundbreakings dropped 30.2% in April to a seasonally adjusted annual rate of 891,000, reports the Associated Press (AP).

Housing starts have not been that low since February 2015, AP said.

One real estate analyst called it the largest monthly decline on record.

Some regions fared worse than others.

The Northeast and the West saw drops of 43.6% and 43.4%, respectively.

In the South, starts dropped 26%, while the Midwest saw a decline of 14.9%.

“The monumental decline in home construction activity in April was widely expected, but the decline is breathtaking nevertheless,” said Matthew Speakman, economist for the real estate firm Zillow, who called the month-on-month decline “easily the largest on record”.

Home completions also fell 8.1% in April.

Building permits for new housing dropped 20.8%, said AP.

Image: Residential construction in Modesto, California (Scott Blake/Unsplash)