Housing construction plummets 6.2 pct. in August

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Housing construction plunges in August to lowest level in 17 years, showing depth of crisis .

Construction of new homes and apartments fell to the lowest level in 17 years last month, showing the country is still gripped by a severe housing downturn that has triggered billions of dollars of losses and is reshaping the structure of U.S. finance.

The Commerce Department reported Wednesday that housing construction dropped a surprise 6.2 percent last month to a seasonally adjusted annual rate of 895,000 units. That's the slowest building pace since January 1991, another period when housing was going through a painful correction.

The decline is larger than the 1.6 percent drop analysts expected and showed weakness in all the country except the West.

The data was bound to shake Wall Street, already rattled by a crisis in the financial system. Stock futures pointed to a lower opening, Dow Jones sank about 200 points at the opening