New Housing Construction Plunges In August

Despite leaving housing starts - which can be translated into potential new clients for lawn and landscape contractors - at their lowest level in 10 months, the August 2001 number is only down 0.3 percent from the same month last year. This August’s drop in housing starts could be an indicator of a slumping economy, however, figures for the coming months will more accurately reveal how the impact of the World Trade Center and Pentagon attacks will affect the housing market and economy overall. In July, housing construction rose by 0.4 percent.

In August, single-family home construction fell by 2.4 percent to a rate of 1.25 million, following a 1.1 percent decline the month before. Despite consecutive month drops, this figure is slightly below its 12-month average. Construction of condos, apartments and other multifamily housing dropped by nearly 23 percent in August.

By region, housing starts fell by nearly 14 percent in the South. In the Northeast, they declined by 7.7 percent, and in the West, housing construction dipped by 3.7. However, construction in the Midwest rose by 6.6 percent.

Low interest rates have helped to keep housing activity stable despite the economic slowdown, which started in the second half of last year, according to the Associated Press. In August, the average rate on a 30-year fixed-rate mortgage was 6.95 percent, down from 8.02 percent for the same month a year ago.

Jumping to 4.9 percent in August, the unemployment rate, another key indicator of the nation’s economy, will likely see a large increase in September due to the attacks, according to reports.

The Federal Reserve attempted to jump-start the economy on Monday before Wall Street stock trading commenced following a four-day hiatus resulting from the World Trade Center attack. The reserve cut interest rates for the eighth time this year, pushing borrowing costs to a nine-year low.