New housing construction in the U.S. rebounded in August from an unexpectedly large dip in July but failed to reach the levels expected by most economists.
According to figures released Wednesday by the Commerce Department, new privately-owned housing starts came in at a seasonally adjusted annual rate of 750,000, a 2.3 percent increase from revised July levels.
The increase comes in part because revisions showed July housing starts at a 733,000 rate rather than the 746,000 initially reported.
So, while housing starts did rebound from July levels, the rate of new construction still came in notably below the 768,000 rate predicted by most economists.
New building permits, a leading indicator for housing starts, fell modestly in August, falling to a seasonally adjusted annual rate of 803,000, 1.0 percent below the revised July rate of 811,000. The July revision was a minor change from the 812,000 rate initially reported.
Most economists had expected building permits to show a steeper drop to an annual rate of about 796,000.
Robert Kavcic, an economist at BMO Capital Markets, said, "August starts and permit numbers were so-so, but the broader trends suggest that the U.S. housing recovery is solidifying."
Single family housing starts remained especially strong, coming in at a rate of 535,000, 5.5 percent above the revised July rate and the highest level since April 2010. Construction in housing with five or more units, by contrast, fell 2.8 percent.
Regional data from the Commerce Department showed decreases in housing starts in the West and Northeast that were offset by a large jump in the Midwest and a smaller increase in the South, the largest of the four housing markets considered by the department.
Housing starts in the Northeast fell by 12.6 percent along with a 4.3 percent drop in the larger Western housing market.
In the South, housing starts rose 3.7 percent, while the Midwest saw a 20.7 percent increase.
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