U.S. housing starts edge up in August, falling short of expectations
New housing starts were nearly flat in August compared with July, suggesting builders may be taking a breather as the housing recovery matures.
Housing starts last month reached a seasonally adjusted annual rate of 891,000 units last month, up 0.9% from July. Despite the meager one-month improvement, August’s rate was up 19% from the same month last year.
Excluding apartment building, which tends to be more volatile, starts for single-family homes were up a healthy 7% from July.
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IHS Global Insight economists Patrick Newport and Stephanie Karol nevertheless called the report a disappointment. They said given weather patterns over the summer, a sizable bounce-back in new construction had been expected in August.
“Should we be concerned about the new construction market?” the economists wrote. “Concerned, yes, but not too concerned yet.”
They noted that the number of new households is increasing, meaning that demand should be outstripping supply. Furthermore, builders remain relatively optimistic about the future.
The number of building permits, often considered a more reliable indicator, declined 3.8% in August from the prior month but was up 11% from a year earlier. New permits were issued at a seasonally adjusted annual rate of 918,000 units.
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