US building permits sink to five-year low, housing starts sink

(Sharecast News) - Two leading economic indicators for the US housing market came in well under forecasts for August, pointing to a slump in activity for new residential construction. Building permits - a closely watched gauge of future construction activity - dropped 3.7% from 1.362m to 1.312m, surprising economists who expected a rise to 1.370m.

This was the lowest monthly level since May 2020, after residential construction ground almost ground to a halt following the outbreak of the Covid-19 pandemic.

Meanwhile, privately-owned housing starts sank 8.5% last month to a seasonally adjusted annual rate of 1.307m, down from a revised 1.429m in July.

The figure, which was 6.0% below the number of housing starts in August 2024 and close to its lowest level in five years, came in well below the consensus estimate of 1.370m.

At the same time, housing completions actually increased 8.4% over the month to 1.483m, but were still 8.4% below the 1.755m seen in August 2024.