Annual rate of construction falls 10.6% in October in a drop that surprises economists.
NEW YORK (CNNMoney.com) -- Home builders initiated construction of far fewer new homes in October than the month before, a big and unexpected drop for the struggling industry, according to a government report issued Wednesday.
Homebuilders began construction at an annual rate of 529,000 new homes during the month, 10.6% below the revised September rate of 592,000 and 30.7% below the 763,000 rate during October 2008. It was the lowest level of housing starts since April, when the annual rate was 479,000.
New home construction forms a big part of the nation's economy. When people buy new homes, they also purchase many products to fill them.
Fewer new homes being built may be a bad sign that the impact of the government's economic stimulus package may be limited.
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