By Ben Leubsdorf and Sarah Chaney 
 

WASHINGTON--U.S. housing starts slipped again in August, but building permits rebounded.

Housing starts decreased 0.8% from the prior month to a seasonally adjusted annual rate of 1.18 million in August, the Commerce Department said Tuesday.

Residential building permits, which typically lead starts by a month or two, rose 5.7% to a 1.30 million annual rate last month.

Economists surveyed by The Wall Street Journal had expected starts at a 1.18 million annual pace and permits at a 1.22 million annual rate in August.

Both starts and permits fell in July, but revisions in Tuesday's report showed the declines weren't as steep as earlier estimated.

Starts rose 1.6% in August for single-family homes and fell 6.5% for buildings with two or more units. Permits fell 1.5% for single-family houses and jumped 19.6% last month for apartment buildings and other multifamily buildings.

Monthly data on housing starts tend to be volatile and imprecise; August's 0.8% loss came with a margin of error of 9.6 percentage points. The 5.7% rise for permits had a 2.0-point margin of error.

More broadly, starts were up 2.7% in the first eight months of 2017 compared with the same period a year earlier. Permits rose 7.5% from the first eight months of 2016.

Limited supply and fast-rising prices have pressured many would-be home buyers this year, despite mortgage rates that moved lower during the spring and summer. In July, purchases of previously owned homes and newly built single-family homes both fell from the prior month.

Hurricane Harvey hit the Gulf Coast in late August, followed by Hurricane Irma striking Florida in early September. The storms have started to scramble U.S. economic indicators, pushing up jobless claims in recent weeks and depressing industrial production during August, and home-construction data could be clouded for several months.

The Commerce Department said Tuesday that hurricane-affected counties in Florida and Texas accounted for about 13% of total U.S. building permits last year.

Granger MacDonald, chairman of the National Association of Home Builders, said Monday that builder confidence dimmed this month as "recent hurricanes have intensified our members' concerns about the availability of labor and the cost of building materials."

Economic forecasters expect the storms will cause weaker growth in the short run, but activity should pick up in subsequent quarters as rebuilding efforts gain traction.

The Commerce Department's latest report on housing starts and building permits can be accessed at: https://www.census.gov/construction/nrc/pdf/newresconst.pdf

Write to Ben Leubsdorf at ben.leubsdorf@wsj.com and Sarah Chaney at sarah.chaney@wsj.com

(END) Dow Jones Newswires

September 19, 2017 08:45 ET (12:45 GMT)

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