Housing starts increased 3.9% in August to a seasonally adjusted annual rate of 1.615 million units, according to reuters.com. The rate was higher than economists’ expectations of 1.555 million units.
Additionally, housing starts were up 17.4% compared with August 2020. Applications for building permits, a good indication of future activity, rose 6% to 1.728 million units in August.
Single-family housing starts fell 2.8% to 1.076 million units, and multifamily rose 21.6% to 530,000 units.
Builders continued to struggle with shortages of materials and labor, suggesting the housing market could continue to slow economic growth in the third quarter.
The report from the Commerce Department also showed the number of houses authorized for construction but not yet started reached a record high in August—a sign builders are reluctant to take on new projects.