Here are some good news for potential homebuyers and bad news for everyone else: Construction of new homes is down by the largest amount in 27 years, has yet to hit rock-bottom and it appears we are headed for a recession, according to an Associated Press report.

The Commerce Department reported Thursday that construction was started on 1.353 million new homes and apartments last year, down 24.8 percent from 2006. It was the second biggest annual decline on record, exceeded only by a 26 percent plunge in 1980, a period when the Federal Reserve was pushing interest rates to post-World War II records in an effort to combat an entrenched inflation problem.

For December, construction fell by a bigger-than-expected 14.2 percent, marking the weakest pace of home building in more than 16 years. Building permits fell 8 percent last month to 1.07 million, the lowest level since 1993.

Many economists believe that the current slump in housing will rival the dive in the late 1970s and early 1980s when housing construction fell for four straight years before beginning to recover after the severe 1981-82 recession.

Initially, I wondered which areas were hit hardest since there is such a difference in perception and disparity in housing prices between cities in California and New York and the rest of the country. While all parts of the country have been hit, the Midwest was hit hardest and the South the least, according to AP.

The drop in construction in December was bigger than economists had been expecting and reflected weakness in all parts of the country. Housing construction fell by 30.8 percent in the Midwest and was down 25.8 percent in the Northeast and 19.6 percent in the West. The decline in the South was a smaller 3.3 percent.

I like that our candidates, especially Hillary Clinton, have spoken about this issue. At the Las Vegas debate, she proposed forcing banks to wait 90 days before foreclosing and other measures to help people keep their homes. I agree with that, although I would like banks and property owners in the Bay Area to lower prices to help more working and middle class families own homes here. A family with an income of $100,000 a year cannot afford to buy a home here! I have many friends busting their butts at day jobs, who have lived in the area for years, yet cannot afford to buy anything. I cannot help but feel smug at the "get rich quick" schemes and preying tactics of some companies and people who banked on the housing market here.

In similar news, the Labor Department said the number of newly laid off workers filing for unemployment benefits dropped by 21,000 last week to 301,000, which is the third consecutive weekly decline after a sharp increase in December, reported AP.