The US housebuilding sector slowed dramatically last month as new home construction tumbled to a six-year low, according to figures released on Friday which contained troubling signs for the economy.
The fall in permits for new homes suggests the housing market has reached a critical point as builders abandon speculative residential developments to curb oversupply. The largest US homebuilders do not expect the market to recover until early 2008, and have ended virtually all speculative building in a bid to clear inventories which extend more than seven months for single-family homes and more than eight months for condos.
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