Washington, DC, Sept. 17--Home building activity dropped off in August from a 17 year high in July, showing a cooling in the red-hot U.S. housing sector.
Housing starts dropped by a larger than expected 3.8% to a seasonally adjusted 1.820 million annual rate, the Commerce Department said Wednesday. This follows a revised increase of 2.6% in July to a 1.892 million rate. July starts were previously reported as rising 1.5% to a 1.872 million annual rate.
The level of housing starts in July was the highest since April 1986, when the rate was at 1.933 million.
The report was weaker than analysts had expected. A Dow Jones Newswires-CNBC poll of 21 economists predicted housing starts would fall by 2.2% to a 1.830 million annual rate.
The housing sector of the U.S. economy has remained strong for the past several years and has defied analysts' expectations as it weathered the 2001 economic recession.
The August report showed that building permits, an indicator of future building activity, rose by 4.8% to a 1.886 million annual rate.
The report showed that single-family starts fell by 4.0% while multifamily starts, or starts on apartment buildings, similarly fell by 4.0%.
Housing starts fell in all regions except for the Midwest where they rose by 1.0%. Housing starts plummeted in the Northeast by 23.3%, dropped 2.7% in the South and fell 1.8% in the West.
August housing starts increased 11.7% from a year ago. An estimated 163,600 houses were actually started, based on seasonally unadjusted figures. An estimated 163,600 building permits were issued in August, also based on unadjusted figures.
