New residential construction in the United States declined unexpectedly in August 2026, while building permits also fell, according to figures released by the Commerce Department on Thursday.
Housing starts decreased by 2.6% to a seasonally adjusted annual rate of 1.309 million units, following a 9.0% decline in July to a revised rate of 1.439 million.
Economists had expected housing starts to increase by 6.1% to an annual rate of 1.315 million, based on the previously reported July figure of 1.239 million.
The August reading was slightly below the forecast, although the substantial revision to July’s data changed the basis for the month-on-month comparison.
Building Permits Fall Below Expectations
Building permits, which provide an indication of future residential construction activity, declined by 2.7% to an annual rate of 1.394 million in August.
The decrease followed a 4.3% increase in July to a revised rate of 1.433 million.
Economists had anticipated a smaller decline of 2.3%, with permits expected to reach an annual rate of 1.410 million from the previously reported July figure of 1.443 million.
The August figure was therefore 16,000 units below expectations.
The declines in housing starts and building permits indicate weaker residential construction activity during the month, although revisions to the previous month’s figures complicate direct comparisons with earlier forecasts.