Sector Snap: Housing Shares Mixed On August Data

PHILADELPHIA (AP) — Housing stocks were mixed Thursday after data showed housing starts improved in August, but construction of single-family homes fell for the first time in six months.

The Commerce Department reported that housing starts rose by 1.5 percent last month to an annual rate of 598,000 units. It's the highest level since last November, but it's still below the rate of 600,000 units expected.

Last month's increase reflected a 25.3 percent surge in construction of multifamily units. But single-family home construction fell 3 percent.

"It is perhaps a bit worrying that all the increase in August came in the volatile multi-family starts component," said U.S. economist Paul Dales at Capital Economics. "With housing starts still some 74 percent below their 2006 peak, the recovery is therefore going to be a very long-winded process."

Regionally, construction rose 23.8 percent in the Northeast and 0.9 percent in the Midwest. Activity was flat in the West and fell 2.4 percent in the South.

Also on Thursday, Freddie Mac said rates for 30-year home loans fell for the third week in a row and are close to record lows reached over the spring. The average rate for a 30-year fixed mortgage was 5.04 percent, down from 5.07 percent a week earlier.