WASHINGTON (Reuters) - Home building projects started in December fell by a sharper-than-expected 14.2 percent to their lowest level in more than 16 years, while permits for future building hit a 14-year low, a government report on Thursday showed.
The Commerce Department said housing starts set an annual pace of 1.006 million units in December, lower than the 1.140 million units expected by economists. It was the lowest pace for housing starts since the May 1991 rate of 996,000 units.
The 1.354 million units started in all of 2007 was the lowest total since 1.288 million units in 1993.
In the previous two big housing downturns, during 1975 and 1982-1983, housing starts stood in the range of 900,000 units per year for several months before rebounding.
"Builders are in trouble. They have a lot of inventory. They decided to cut back on their starts and that's going to crimp the GDP," said Robert Brusca, chief economist, Fact and Opinion Economics in New York.
Building permits fell 8.1 percent to an annual rate of 1.068 million, the slowest pace since a 1.056 million unit rate set in March 1993. Economists polled by Reuters had forecast December permits at 1.140 million units after the 1.162 million rate of November.
There were 1.376 million permits issued in all of 2007, down 25 percent from their year-ago levels and the lowest since 1.333 million permits in 1995.
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