Homebuilders remain hesitant to begin new construction as inventory of existing homes remains high amid elevated mortgage rates and home prices near record levels.
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In August, housing starts dropped 8.5% month-over-month to an annualized rate of 1.307 million homes, below the expectation of 1.365 million. This marks the lowest level since May.
In addition, single-family housing starts fell by 7.0% to an annualized rate of 890,000 units, the lowest level in over a year.
Building Permits Slide, but Rate Cuts Could Lift Sales
Building permits are also taking a hit, coming in at 1.312 million, missing the estimate of 1.370 million and falling from 1.362 million in July.
Homebuilder sentiment is still sullen, according to a survey from the National Association of Home Builders (NAHB) released on Tuesday. However, expectations for sales over the next six months received a boost. The Fed is expected to cut rates several times before the end of the year, which could decrease mortgage rates and boost sales activity.
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