updated 9/19/2007 3:17:01 PM ET 2007-09-19T19:17:01

Construction of new homes fell in August to the slowest pace in 12 years as troubles in the housing industry continued to intensify.

The Commerce Department reported Wednesday that construction of new homes fell by 2.6 percent in August to a seasonally adjusted annual rate of 1.331 million units.

The housing industry is experiencing its steepest downturn in 16 years with analysts forecasting weak prices and further declines in sales for months to come, given rising mortgage defaults which are dumping even more homes on an already glutted market.

On Tuesday, the National Association of Home Builders reported that its index of builder

confidence fell in September to 20, tying the lowest level on record.

But homebuilder shares soared Wednesday after the Federal Reserve's half-point cut.

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 5.03%
$30K home equity loan FICO 5.68%
$75K home equity loan FICO 4.87%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.42%
13.42%
Cash Back Cards 17.94%
17.94%
Rewards Cards 17.15%
17.15%
Source: Bankrate.com