U.S. housing starts fell more than expected in August to 895k, representing a month-over-month decrease of 6.2%, according to data released from the U.S. Department of Commerce on Wednesday morning. The drop pushes the number of starts to its lowest since 1991.
The previous month's level was revised down 11k down to 954k. The consensus was looking for a moderate decline to 950k.
Single-family homes - the most important component in the report, accounting for four-fifths of housing starts - fell 1.9% to 630k, compared to the previous month's 642K. This is the third month of decreases for single-family units.
Multiple-family homes contributed 265k, compared to the the previous month's 312k level.
Meanwhile, building permits took an even steeper dive, falling 8.9% to 854k in August, down from 937k units in July. In the prior month, the index fell 17.7%, yet that decline was misleading due to increased activity in June attributed to new housing regulations in New York City.
The consensus was looking for 928k permits.
Single-family permits fell 5.1% in the month, falling to 554k in August from July's 584k. Multiple-family units are down to 300k, down from 353k units in July.
Housing starts refer to the number of homes being built and provide a sense of how the housing sector has performed in the previous month. Building permits represent plans to construct new homes, an indicator of housing performance in upcoming months.
By Patrick McGee and edited by Stephen Huebl
©CEP News Ltd. 2008