Housing starts and building permits plunge in August

Housing starts and building permits plunge in August - Sep. 19, 2006:

"Home builders slammed on the brakes in August as starts on new homes sank to their lowest level in more than three years, and a drop in permits signaled more weakness ahead for the real estate market.

Housing starts sank to an annual rate of 1.67 million last month from July's 1.77 million pace, the Census Bureau reported Tuesday. That marked a 6 percent decline from July and a nearly 20 percent drop from a year earlier."

Starts are at the lowest level since April 2003. It also marked the sixth time in the last seven months that starts have fallen from the previous month's level.

Economists surveyed by Briefing.com had forecast starts would drop to a 1.74 million rate.

Building permits, which are seen as a reading of builders' confidence in the market, fell to a 1.72 million annual rate in August from a downwardly revised 1.76 million in July. Economists had forecast permits would slow to a 1.75 million pace in August.

Many of the nation's largest home builders, including KB Home (Charts), Lennar (Charts), Toll Brothers (Charts) and Hovnanian (Charts), have been lowering guidance on home sales in recent weeks, reporting lower prices and excess supply of homes on the markets.