US Home Construction Falls 5.1% In August After Gains
Workers toil on a multifamily dwelling Tuesday, Aug. 4, 2020, in Winter Park, Colo. The Commerce Department reported Tuesday, Aug. 18, construction of new U.S. homes surged 22.6% last month as homebuilders continued to bounce back from the coronavirus pandemic. (AP Photo/David Zalubowski)
WASHINGTON: U.S. housing construction fell a surprising 5.1% in August after three months of strong gains when home builders ramped up projects following a pandemic-induced shutdown in March and April.
Applications for building permits, which is a good barometer of future activity, dipped a slight 0.9% in August to a seasonally adjusted 1.47 million but that decline followed solid gains in the previous three months including a 17.9% rise in July.
New homes were started at a seasonally adjusted annual pace of 1.42 million last month after a 17.9% surge in July, the Commerce Department reported Thursday.
While the drop-off in new homes was greater than economists had expected, construction remains 51.6% above an April low.
Also, this week a survey gauging builder sentiment found strong optimism. The survey by the National Association of Home Builders and Wells Fargo showed that builder confidence reached to an all-time high in September, even in the face of rising costs for building materials.
Declines in activity were led by the Northeast, where home construction fell 33.1%. There was also a decline of 17.7% in the South, traditionally a strong region.
Strength in August came from solid gains of 28.4% in the Midwest and 19.5% in the West.
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