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New-home construction along the Wasatch Front dropped sharply for the second month in a row in October to the lowest level since 1990, mirroring the downturn in housing markets felt nationally.

With demand on the decline, builders locally took out permits for the construction of 530 single-family homes, down from 1,186 in October 2006, according to Construction Monitor, a company that tracks building activity throughout the West.

The last time residential building activity along the Wasatch Front in October dipped that low was 17 years ago, when builders pulled 473 permits for new single-family housing units.

The drop is especially steep when the state's population is taken into account. In 1990, the state's count was 1.7 million people; today the total is estimated at nearly 2.7 million.

"It's definitely the most uncertain time for builders in Utah that we've had in at least 20 years," said Jim Wood, director of the Bureau of Economic and Business Research at the University of Utah.

Nationwide, construction of single-family homes fell to the lowest level since October 1991, the Commerce Department reported Tuesday.

Nationally and in Utah, sales of single-family homes are down compared with last year, and many experts are predicting things will get worse before they get better.

''All of us are ratcheting down our expectations for the bottom of the housing sector and I don't think we're there yet,'' said David Resler, chief economist at Nomura Securities International Inc. in New York.

But the timing of the downturn in Utah, compared with the rest of the country, is very different. The residential downturn in many other states started more than a year or two ago; the Wasatch Front's market didn't begin to dive sharply until early this summer.

"I've never seen the market change so quickly," said Curtis Dowdle, executive officer of the Salt Lake Home Builders Association, who has been in the business since early 1970s.

The downturn has been fueled by several factors, among the most prominent the tighter lending standards put in place over the summer after too many bad loans were made to the most risky buyers in the subprime market. The situation has made it more difficult for builders to make sales.

Stung by an increase in defaults on subprime loans, lenders are requiring better credit, larger down payments and more cash reserves from borrowers.

Dowdle believes those tighter lending standards have had a profound effect on the ability for builders to sell homes.

Additionally, years of home-price increases in Utah and other states have put homeownership out of the reach of many families whose incomes haven't kept pace.

With fewer potential buyers, sales for both new and existing homes have fallen in many - but not all - areas of the Wasatch Front.

Another factor was the homebuilding boom, said Jim Bringhurst, president of the Utah Association of Realtors.

"We've built a lot of homes in the last couple of years," he said. "The supply kind of got ahead of the demand. It's going to take some time for those homes to be acquired."

The good news, he said, is that there is a consistent stream of people moving to the state, a steady increase in corporate expansion and lot of Utahns continuing to form households - all of whom will help generate demand for homes. Bringhurst considers the Wasatch Front housing market a healthy one.

Unlike other metropolitan areas in the West, where home prices have fallen, prices from Ogden down to Provo generally are still up over last year. The increases in most areas, however, are in the single digits, not the double digits Utahns have become accustomed to in recent years.

Now there is growing concern about the possibility of falling prices.

"The problem is that consumers are afraid to buy right now," said Eric Allen, director of the Utah/Idaho region for Metrostudy, which tracks new-home construction. "They are under the impression that prices are going to come down."

Allen said prices in some areas in the Salt Lake Valley may decline over the next year or so. But he said he doesn't think they will be as steep as the deep price cuts going on in other markets, such as Las Vegas or Phoenix.

Utah's comparatively strong economy, steady employment and population growth - and the dwindling supply of undeveloped land along the Wasatch Front - will make this downturn relatively short-lived, Allen said.

"We may see prices flatten out and we may see some prices fall a bit over the next year, but over the long term you're going to see prices go up," he said.

Wood, of the U.'s Bureau of Business and Economic Research, said statewide, he expects builders in 2007 to have taken out about 14,000 single-family permits this year, down 30 percent from about 20,000 in 2006. The peak year for single-family construction was 2005, when builders took out 20,800 permits.

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* The Associated Press contributed to this report.