Housing starts dropped for a third month in August, according to a Census Bureau report, falling 2.4% to an annual rate of 1.609 million.

A huge decline in the Midwest was partially offset by a large rise in the Northeast region and a small gain in the South. Building permits also fell but were still 3% higher than August starts.
The number of housing units under construction dipped only slightly from July's 16-year high pace.
"This does not mean that housing is becoming a drag on the economy after being one of the key growth engines for a year" said Jim Haughey, Newport Communications' senior economist. "Consumer demand is still strong enough to keep housing starts a little higher than the August level into next year. Bad building weather often causes temporary declines."
Separately, The National Assn. of Homebuilders' September survey reported that builders experienced increased sales and model home traffic and had boosted their expectations for sales six months ahead.
Haughey said that while housing is no longer the strong growth engine it was earlier this year, housing will continue to contribute to economic growth because new homes get bigger and fancier in an expanding economy and remodeling, almost as large as new construction, will continue to expand.