The U.S. Commerce Department released the housing market data on Thursday. Housing starts in the U.S. declined 3.0% to 1.126 million annualized rate in August from a 1,161 million pace in July, missing expectations for an increase to 1.170 million.

July's figure was revised down from 1.206 million units.

The decrease was driven by falls in starts of single-family and multifamily homes.

Housing market benefits from the strengthening of the labour market.

Building permits in the U.S. rose 3.5% to 1.170 million annualized rate in August from a 1.130 million pace in July.

Analysts had expected building permits to climb to 1.160 million units.

Starts of single-family homes fell 3.0% in August. Building permits for single-family homes were up 2.8%.

Starts of multifamily buildings decreased 3.0% in August. Permits for multi-family housing jumped 4.7%.