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 per cent in August to a seasonally adjusted 1.47 million but that decline followed solid gains in the previous three months including a 17.9 per cent rise in July.
New homes were started at a seasonally adjusted annual pace of 1.42 million last month after a 17.9 per cent 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 per cent 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 per cent. There was also a decline of 17.7 per cent in the South, traditionally a strong region.
Strength in August came from solid gains of 28.4 per cent in the Midwest and 19.5 per cent in the West.