The U.S. Commerce Department announced housing starts fell 2.6 percent in August to a seasonally adjusted annual rate of 1.331 million units, compared with a downwardly revised figure of 1.367 million units in July.
Year-over-year, new housing starts were down 19 percent, with single-family starts off 27 percent.
It was the lowest pace for housing starts since the June 1995 rate of 1.281 million units, according to the Commerce Department.
Building permits also fell, 5.9 percent to an annual rate of 1.307 million, also the lowest since June 1995.
The decline in construction last month took place exclusively in single-family homes, where starts fell 7.1 percent to 988,000. Multi-family housing starts rose 12.8 percent last month to 343,000.
Single-family starts were down in all regions of the United States, falling 20 percent in the Northeast, 18 percent in the West, 3 percent in the Midwest and 1 percent in the South.