Home Starts Down for First Time in Five Months

Single-family housing starts fell 3% in August as builders took a breather after five straight months of increased construction activity. The U.S. Census Bureau reported that single-family housing starts fell to a seasonally adjusted annual rate of 479,000 in August from a 494,000 rate in July. The July rate was revised upward by 4,000 starts. Since February, single-family starts are up 34%. "So it is no surprise to see builders take a breather," said Mike Larson, real estate analyst for Weiss Research. "There may be some nervousness about the upcoming expiration of the first-time homebuyer tax credit, and we clearly have some lingering reluctance among bankers to fund construction projects," Mr. Larson said. The tax credit has been an important factor in stimulating demand, according to the National Association of Home Builders. "However, the window is now basically closed for being able to start a new home that can be completed in time for buyers to take advantage of the tax credit before it expires at the end of November," NAHB chairman Joe Robson said. NAHB, the National Association of Realtors and other housing groups are urging Congress to extend the tax credit for another year.