New Home Construction Hits 17 Year Low

There is a new low when it comes to new home construction. Initial construction of U.S. homes fell to a 17 year low in September, according to a government study released Friday.

But Builders in Lexington say, here in the Bluegrass, it could be worse.

Nationally, home construction and building permits have both fallen sharply since September to levels not seen since January of 1991.

Economists say the sharp fall in building activity suggests home building will continue to be a drag on the economy, citing the battered housing market as the root of the problem.

Gatewood Arnold, of Arnold Real Estate in Lexington, says his business has slowed a little and he is building fewer homes. He says he has spoken to other builders in Lexington and say they are having the same types of troubles.

But, he says he is "cautiously optimistic" and believes the market in Lexington is stronger than the national market.

Arnold says to make up the difference from the lack of new homes, he has started home remodeling.

Economists say the drop in building could actually help the struggling real estate market rebound.

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