Housing starts skid 5.8% to 1.14 million pace in August as recovery remains fitful

By Andrea Riquier, Market Watch–

Home builder construction stumbled in August, another sign of choppy momentum for the housing market.

Housing starts ran at a seasonally adjusted annual pace of 1.14 million, the Commerce Department said Tuesday, 5.8% below July and missing forecasts of a 1.18 million pace. That was 0.9% lower than a year ago.

Permits were flat at a 1.14 million pace in August, but were 2.3% lower than a year ago. Single-family starts slid 6% during the month to a 722,000 annual pace, which was 1.2% lower than year-ago levels.

Starts hit the second-highest pace of the recovery in July, and the government’s monthly data can be volatile, but analysts have expected to see more robust building for some time. Demand for housing — both new construction and previously-owned — continues to surge as the economy remains healthy.

Most large publicly-traded builders have enjoyed sturdy growth this year, with orders gaining an average of about 9% during the second quarter. LennarLEN, -3.78%   reported results that beat expectations early Tuesday.

On Monday, an industry group reported that builder sentiment soared to match its best reading of the past decade in September, so activity may rebound in the coming months.