Construction of new homes is sliding in the US. Reports say that even applications for future projects have reduced to record low level in the month of January. The Commerce Department report reveals that construction of new homes and apartments has dropped to as low as 16.8%. Earlier, economists had expected that there would be construction of 530,000 units but it could reach only to 466,000 units. Similarly, number of foreclosures have increased.
Last year more than 2 million American homeowners faced foreclosure proceedings. A report by Credit Suisse says that this year the number of foreclosure could rise up to 10 million. The worst affected region in the US is its Western part where in construction activity has fallen to 6.4% - the slowest growth since October 1966. Major reasons for current bad state of affairs are tighter lending standards, rising defaults and fear about the housing market's future. However, new initiatives by Obama administration is expected to help construction industry.