New residential construction fell sharply in August as work on apartment buildings plunged.
Building dropped 14.4 percent last month to a seasonally adjusted annual rate of 956,000 homes after big gains in July that pushed up construction to 1.12 million homes, the Commerce Department reported on Thursday.
{mosads}”The August drop in multifamily starts is not too surprising, given how volatile the numbers have been the last 18 months,” said David Crowe, chief economist of the National Association of Home Builders (NAHB).
“And while single-family starts registered a slight decline, low mortgage rates, affordable home prices and pent-up demand will keep single-family production moving forward in 2014.”
July’s figure had been the best pace since before the recession started in 2007.
Still, the August amount is 8 percent ahead of the August 2013 rate of 885,000.
“Our members are telling us that traffic to new model home sites and sales expectations are on the rise,” said NAHB Chairman Kevin Kelly, a homebuilder and developer from Wilmington, Del. “Despite the monthly blip, single-family starts are still 8 percent above last year’s level.”
Work on multi-family buildings, like apartments, plunged 31.5 percent in August.
Apartment building has helped bolster residential construction through the housing sector’s gradual recovery.
Also, single-family home construction slipped 2.4 percent in August.
Applications for building permits, which provides a look at planned building down the road, fell 5.6 percent in August to a seasonally adjusted annual rate of 998,000, down from 1.057 million in July.
Permit requests are running 5.3 percent ahead of August 2013.
Meanwhile, combined housing starts fell in all regions of the country.
The Northeast, Midwest, South and West posted respective drops of 12.9 percent, 10.3 percent, 10.9 percent and 24.7 percent.
For building permits, all regions posted losses.
The Northeast, Midwest, South and West registered overall permit losses of 11.6 percent, 12.4 percent, 0.6 percent and 8.3 percent, respectively.
—This post was updated at 11:55 a.m.