WASHINGTON — Builders broke ground on fewer houses and apartment complexes in August, a possible sign that the housing market may be leveling off after accelerating for much of the year.
Housing starts last month fell 3 percent to a seasonally adjusted annual rate of 1.13 million homes, the Commerce Department said Thursday.
Construction activity slowed sharply in the Northeast and Midwest last month, edged downward in the West and climbed in the South. Still, homebuilding appears much stronger than a year ago, despite figures that can be highly volatile on a monthly basis. Construction slowed in part due to the expiration of tax incentives for developers in New York.
“This is a mere blip on the radar,” said Tom Wind, executive vice president of home lending at EverBank. “The housing market’s underlying fundamentals remain on pace for continued recovery.”
Housing starts have climbed a solid 11.3 percent this year to date. Steady job gains of 2.9 million in the past 12 months are contributing to increased demand from buyers and renters. As the recovery from the Great Recession has entered its seventh year, residential construction has started to both reflect and fuel broader economic growth.
Developers see favorable demographics helping to sustain demand, as approved permits rose 3.5 percent in August to an annual rate of 1.17 million.
New construction has yet to satisfy demand, a sign that further building will likely remain profitable. Only 5.2 months’ supply of new homes is listed for sale, below the standard level of six months usually seen in a healthy market. This shortage has led to rising prices for new and existing homes.
