U.S. Housing Starts Slow

Washington, Dhu-AlHijjah 18, 1437, September 20, 2016, SPA — U.S. housing starts fell more than expected in August as building activity declined broadly after two consecutive months of solid increases, but a rebound in permits for single-family homes suggested demand for housing remained intact, the government reported Tuesday.
The Commerce Department said groundbreaking plunged 5.8 percent to an annual pace of 1.14 million units last month.
Permits for future construction fell 0.4 percent to a 1.14 million-unit rate in August as approvals for the volatile multi-family homes segment dropped 7.2 percent to a 402,000-unit rate. Permits for single-family homes, the biggest segment of the market, surged 3.7 percent to a 737,000-unit pace.
Starts of single-family homes fell 6 percent to a 722,000-unit pace last month, the lowest level since October 2015. With permits rising, single-family homebuilding could rebound next month.
The single-family market is supported by a shortage of previously owned homes available for sale.
Starts of multi-family apartment buildings fell 5.4 percent to a 420,000-unit annual pace last month. The segment has been supported by strong demand for rental accommodation as many Americans have had difficulty purchasing homes since the 2007 housing-market collapse.
The August decline in housing starts was largely anticipated as groundbreaking activity has exceeded permit approvals over the past several months, especially in the single-family housing segment.
The drop left housing starts just below their second-quarter average. Economists expect that residential construction will contribute to economic growth in the third quarter after being a slight drag on output in the April-June period.
–SPA
17:29 LOCAL TIME 14:29 GMT