Housing Starts Hit 3 Year Low

From Bloomberg:

U.S. August Housing Starts Decrease 6% to a 1.665 Million Pace

Housing construction in the U.S. declined more than forecast last month to the lowest level in three years as waning demand left builders with a growing number of unsold homes.

The 6 percent decrease in housing starts to an annual rate of 1.665 million followed a 1.772 million pace in July, the Commerce Department said today in Washington. Building permits dropped for a seventh straight month to the lowest level in four years and a sign home construction will keep slowing.

The battered U.S. housing market poses a risk of a larger slowdown in the economy and reinforces economist forecasts that Federal Reserve policy makers tomorrow will keep interest rates unchanged for a second month. Builder confidence dropped to a 15- year low this month as price gains and orders slowed, an industry survey showed yesterday.
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Economists expected starts to fall to an annual rate of 1.746 million units from an originally reported 1.795 million pace in July, according to the median of 68 forecasts in a Bloomberg News survey. Estimates ranged from 1.62 million to 1.85 million.

Starts, which are down 20 percent from a year earlier, have fallen for three straight months. The August level was the lowest since 1.643 million in April 2003.

Building permits dropped to an annual rate of 1.722 million from 1.763 million the prior month. Not since May to November 1986 have permits declined seven straight months.

From the U.S. Department of Commerce:

NEW RESIDENTIAL CONSTRUCTION IN AUGUST 2006 (PDF)

Privately-owned housing starts in August were at a seasonally adjusted annual rate of 1,665,000. This is 6.0 percent (±9.2%)* below the revised July estimate of 1,772,000 and is 19.8 percent (±5.0%) below the August 2005 rate of 2,075,000.

Single-family housing starts in August were at a rate of 1,360,000; this is 5.9 percent (±8.1%)* below the July figure of 1,445,000. The August rate for units in buildings with five units or more was 265,000.
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Privately-owned housing units authorized by building permits in August were at a seasonally adjusted annual rate of 1,722,000. This is 2.3 percent (±1.2%) below the revised July rate of 1,763,000 and is 21.9 percent (±1.3%) below the August 2005 estimate of 2,205,000.

Single-family authorizations in August were at a rate of 1,279,000; this is 3.5 percent (±1.2%) below the July figure of 1,325,000. Authorizations of units in buildings with five units or more were at a rate of 370,000 in August.