U.S. single-family homebuilding fell for a second straight month in August as builders continued to struggle with shortages of materials and labor, suggesting the housing market could remain a drag on economic growth in the third quarter.
The report from the Commerce Department on Tuesday also showed the number of houses authorized for construction but not yet started raced to a record high last month, a sign of reluctance by builders to take on new projects.
Builders’ inability to ramp up the production of single-family homes amid a massive housing shortage is driving up prices and keeping some first-time buyers from the market.
“While lumber prices have plummeted in the spot market, those lower prices have not yet made their way to home builders,” said Mark Vitner, a senior economist at Wells Fargo in Charlotte, North Carolina. “Moreover, other essential building materials remain in short supply, including windows, cabinets, electric…