New home building in the US fell 2.6 per cent last month - the lowest level in more than 12 years.
Building permit activity, a sign of future construction plans, also dropped to a low not seen since mid-1995, a government report out today showed.
The Commerce Department said new housing building project set an annual pace of 1.331 million units in August, slightly lower than the 1.35 million units expected by economists and the upwardly revised pace of 1.367 million rate for July. It was the lowest rate for "housing starts" since the June 1995 rate of 1.281 million units.
Building permits fell 5.9 per cent to an annual rate of 1.307 million, also the lowest since June 1995 when they reached 1.305 million.
By region, the drop in housing starts was the worst in the northeast, where they fell 38 per cent in August, the sharpest drop since December 1990. New building project were off 18 per cent in the west but rose 4.2 per cent in the midwest and 11.4 per cent in the south.
In the financial markets, prices of US Treasury bonds were steady after the weak housing figures and other data on Wednesday showing consumer prices were in line with expectations.
For some economists, the weak housing data reinforced the belief that the sector will continue to weigh on economic growth.
"The housing market continues to be under pressure, constraining economic growth well into next year," said Lindsey Piegza, market analyst, FTN Financial, New York.