Home construction drops far more than expected

WASHINGTON - Construction of new homes plunged to a record low in January as all parts of the country showed big declines in building activity.

The Commerce Department says construction of new homes and apartments dropped 16.8 percent last month to a seasonally adjusted annual rate of 466,000 units. That's well below the 530,000 units economists expected, and was the slowest pace on records dating back a half-century.

Applications for building permits, considered a good barometer of future activity, also dropped to a record low, falling 4.8 percent to a rate of 521,000 units, slightly below economists' expectations.