Housing starts in August fell 2.6%, according to the Commerce Department, and permits were down 5.9%, both from revised, seasonally adjusted rates for July.

Starts were at a seasonally adjusted annual rate of 1,331,000, 19.1% below August 2006 rate of 1,646,000. Single-family starts in August were down 7.1% from July to 988,000.

Building permits in August came in at 1,307,000, which was a decline of 24.5% from the same month last year. Single-family authorizations in August were down 8.1% from July. Authorizations of units in buildings with five units or more were at a rate of 324,000 in August.

Housing completions in August were down 0.2% to a seasonally adjusted annual rate of 1,523,000, 19.0% below the revised August 2006 rate of 1,881,000.Single-family completions in August were up 3.4% from July at a rate of 1,249,000. The August rate for units in buildings with five units or more was 254,000.

The figures were announced this morning (Sept. 19) jointly by the U.S.Census Bureau and the Department of Housing and Urban Development.

In a research note to investors, Michael Rehaut, home building analyst at J.P. Morgan, wrote, "While these data points represent a modest positive from a supply standpoint, we believe they also signal that the fundamental trough has not yet been reached." The note continued, "Given the lack of a positive catalyst over the next few quarters, and our outlook for fundamentals to remain challenging, if not worsen, we believe near-term downside is likely."