US October housing starts, permits at record low

Construction starts on new U.S. homes fell to a record low in October, as did new applications for building permits, data showed on Wednesday, signaling that the national housing downturn may extend well into the future.

The Commerce Department said housing starts fell 4.5 percent to a seasonally adjusted annual rate of 791,000 units from September's 828,000 units.

New applications for building permits, which give a sense of future home construction, plummeted 12 percent to 708,000 from 805,000 in September.

Michael Sheldon, chief market strategist for RDM Financial in Westport, Connecticut, said the "fairly significant drop" in permits showed that the housing market is "continuing to look for a bottom."

Although a record low, housing starts exceeded Wall Street expectations. Analysts polled by Reuters had forecast they would tumble to 780,000 units. They also expected permits to reach 780,000.

U.S. equity index futures remained in the red after the report was released, while Treasury debt prices held their gains.

From October 2007, housing starts fell 38 percent, which was the biggest year-on-year drop since last December, when they were down 39.4 percent. Permits fell 40.1 percent, the largest drop since March.

Single-family homes make up the majority of new home construction and they were hit hard in October. New construction for such homes fell to a 27-year low of 531,000 units and their permits fell to 460,000, the lowest since February 1982.