Builders slashed construction of new homes last month to the lowest level in nearly a decade, a move that underscores the severity of the sector's slump and signals it will likely continue to be a drag on the economy at least through midyear. The slip in homebuilding last year subtracted more than 1 percentage point from inflation-adjusted economic growth over the second half of 2006.
The plunge in new homebuilding activity in January -- down 14.3% from December and 37.8% from January 2006 levels -- could eventually hasten a recovery by reducing the overhang of unsold homes, however."
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