Housing starts unexpectedly plummet to lowest level since 2020

New U.S. home construction dropped in August to the lowest level since 2020, underscoring the ongoing challenges facing the housing market.

Housing starts tumbled 11.3% last month to an annual rate of 1.28 million units, according to new Commerce Department data released Tuesday. That is well below Refinitiv economists' forecast for a pace of 1.44 million units.

Applications to build – which measures future construction – saw an uptick in August, climbing 6.9% over the course of the month to an annualized rate of 1.54 million units. Compared with the...