Homebuilding drops in August to three-month low

In August, construction on single-family homes — about two-thirds of home construction — dropped by 1.4 percent, while apartment building plummeted 12.4 percent.

"That said, we continue to anticipate modest gains in new-home production through the end of this year with greater momentum building into 2013, and some pockets of improvement are already evident in about a dozen metros nationwide."

Housing starts reached a high of 636,000 in January, and dipped to their lowest level of 518,000 in February. They have gotten no higher than 615,000, which was hit in June, the report showed. 

The number of homes under construction in August dropped to a record-low 408,000 annual rate, the report showed. 

Hurricane Irene and subsequent flooding from Tropical Storm Lee slowed construction in the Northeast, according to analysts. 

Building permits, a gauge of future construction, were at a seasonally adjusted annual rate of 620,000 — up 3.2 percent from July's revised rate of 601,000 and 7.8 percent above the August 2010 estimate of 575,000, providing a signal that building could pick up. 

Builders typically begin construction on single-family homes six months after getting a permit, while apartment construction can take up to a year to get started. 

In 2009, construction dropped to its lowest level in 50 years. Last year was pretty bad, too, and 2011 isn't showing much improvement.

Home construction is only about one-quarter of the housing market, but each house creates about three jobs for a year and about $90,000 in taxes, according to the NAHB.

After previous recessions, housing accounted for at least 15 percent of economic growth in the United States. Since the recession officially ended in June 2009, it has contributed just 4 percent.

The NAHB said Monday that its index of builder sentiment fell to 14 from 15 in September. The index has risen above 20 for only a month in the past two years, and has held between 13 and 16 for six consecutive months, the report said. 

Any reading below 50 indicates negative sentiment about the housing market — a height that hasn't been reached since April 2006.