WASHINGTON – The pace of U.S. home building fell more sharply than expected in August as builders broke ground on new homes at the slowest rate since April 2003, a government report showed on Tuesday.
The Commerce Department said U.S. housing starts fell 6.0 percent in August to an annual pace of 1.665 million units, compared to a downwardly revised 1.772 million in July. Compared to a year earlier, August housing starts were down 19.8 percent from the August 2005 pace of 2.075 million units.
Economists had forecast August housing starts to decline to 1.75 million units from July's originally reported pace of 1.795 million.
Permits for future groundbreaking, an indicator of builder confidence, fell 2.3 percent to a 1.722 million-unit annual pace, the lowest in four years. Economists had expected the Commerce Department to report August permits at a 1.745 million pace.
U.S. single-family starts dropped 5.9 percent to a pace of 1.360 million units, the lowest level since February 2003. Single family permits were down 3.5 percent to an annual pace of 1.279 million units, the lowest since December 2001.
The report came a day after an industry survey showed that home builder optimism sank for the eighth straight month in September to the lowest level in more than 15 years. The closely watched National Association of Home Builders' index of homebuilder sentiment declined 3 points in September to 30, the lowest since February 1991, when the economy had slipped into recession.