Construction on new homes and apartments fell 5.5 percent in August, the biggest decline in 20 months, after hitting an 11-year high in July.
The Commerce Department reported Friday that builders started work on 1.61 million units at a seasonally adjusted annual rate last month. That was down from a 1.71 million-unit rate in August, which had been the strongest pace since March 1987.Economists had been expecting a decline from the July level, believing such a fast pace was not sustainable since the country was starting to be buffeted by layoffs, particularly in manufacturing, from the economic turmoil in Asia.
Still, the Asian currency crisis, which has now spread to Russia and Latin America, has triggered a flood of foreign capital into the United States that has helped drive mortgage rates to their lowest levels in 27 years. Unemployment, even with the layoffs in manufacturing, remains near a 28-year low.