WASHINGTON, Oct 17: US housing starts sank 10.2 per cent in September to a 14-year-low, government data showed on Wednesday, suggesting the struggling property market is still under pressure.

The report showed the pace of new home construction at an annualised rate of 1.191 million units, weaker than the average forecast of 1.300 million, the lowest since July 1993.

The Commerce Department also revised down its report for August to show a rate of 1.327 million units from an earlier estimate of 1.331 million.

The Commerce Department report showed building permits, a sign of future construction activity, fell 7.3 per cent to a weaker-than-expected annual pace of 1.226 million.

The figures highlight the horrific slump in US real estate after a sizzling market turned suddenly cold last year. Economists say the slump is the main drag on US economic growth.

Over the past 12 months, US housing starts were down 30.8 per cent and permits down 25.9 per cent.

The massive declines highlight the fact that builders have a big inventory of unsold homes that are keeping prices down. With credit conditions tightening and mortgage delinquencies on the rise, the financial sector is also being affected.

On Tuesday, Treasury Secretary Henry Paulson said the problems in housing represent “the most significant current risk” to the US economy and that policymakers and the private sector should mobilize to alleviate the pain and avert future crises.

Builder confidence has hit an all-time low according to surveys, while the overhang of unsold homes is at its highest level since the early 1990s.

But potential buyers are having a harder time getting mortgages and companies have reported cancellation rates on sales contracts of 50 per cent or more. Consumers are also beginning to ignore the builders’ incentives and are waiting for even better deals as the housing crunch worsens, according to the National Association of Homebuilders survey released on Tuesday. —AFP