ConDig (19-Sept-17).  Construction of new homes in the US crumbled for a second straight month in August as a lingering weakness in the volatile multifamily home sector outweighed a rise in single-family home starts.

Housing starts dipped 0.8% to a seasonally adjusted annual rate of 1.18 million units, according to latest figures from the Commerce Department.

Single-family production jumped 1.6% in August to a seasonally adjusted annual rate of 851,000 after a downwardly revised July reading. But multifamily starts tumbled 6.5% to 329,000 units after an upward July revision.

For the year-to-date, single-family starts are 8.9% up on their level over the same period last year.

Despite the dip in starts in August, building permits, which are a sign of future activity, surged 5.7% to a rate of 1.30 million units, the highest level since January.

It comes as permits for multi-family home construction roared up 19.6%, while single-family home permits fell 1.5%.

“This month’s report shows that single-family starts continue to move forward at a gradual, consistent pace,” said National Association of Home Builders (NAHB) chief economist Robert Dietz.

“The three-month average for single-family production has reached a post-recession high, but the months ahead may show volatility given that the building markets affected by Hurricanes Harvey and Irma represent about 14% of national production.”

Hurricane Harvey and Irma caused widespread devastation across Houston and Florida this month and could put a dent in starts in September, analysts warn.

Home builders are also still facing lot and labor shortages, along with rises in building material costs, which is hampering the industry’s progress.