EmailNew housing starts fell 5.0% in August from 601,000 in July to 571,000. That is the lowest number of new starts since May when poor weather conditions caused construction delays. The Briefing.com consensus expected housing starts to fall to 590,000.
New private residential construction projects have essentially moved sideways throughout 2011. The August decline brings the starts level back in-line with the three-month moving average starting in January.
Single family starts, which tend to be more stable, slid 1.4% to 417,000 in August from 423,000 in July.
Multi-family starts declined 13.5% in August to 154,000.
The number of homes currently under construction tumbled 1.2% from 413,000 in July, which was the previous historical low, to 408,000. The continued drop in the number of homes under construction highlights the inventory struggles builders expect to face over the coming months.
In contrast, building permits increased from 601,000 in July to 620,000 in August and easily beat consensus expectations for a decline to 585,000. That is the highest number of permit issuances since December 2010 when changes in building codes caused builders to inflate permit activity before the start of the new year. Excluding this exogenous spike, permits are at their highest point since April 2010.
The rise in permits suggests that inventory levels may be reaching a floor and that housing starts may begin to rise again by the start of the year.
