(AP Photo/Jeff Roberson, File)

Housing starts in August came in at a seasonally adjusted annual rate of 1.18 million. Starts slid 0.8% from a revised July estimate of 1.19 million. Nevertheless, August starts were 1.4% higher than the August 2016 rate 0f 1.164 million and starts on single-family homes was even strong, increasing 17.1% from a year ago. Meanwhile, 5.7% more building permits were issued in August than in July, with 1.3 million authorizations. Last month was also 8.3% above the August 2016 rate of 1.2 million.

It is unclear whether Hurricanes Harvey and Irma played a role in the modest decline in housing starts, but it is clear that they will at the very least intensify recent builder concerns about short labor and high material costs.

About 4% of total housing units authorized in 2016 were in FEMA disaster areas in Texas, while 9% were in Florida, according to The U.S. Census Bureau, which publishes the new residential construction report in conjunction with the U.S. Department of Housing and Urban Development.

Starts in the hurricane-hit regions may be down again in September. In the long run, however, homes that need to be totally rebuilt will be counted as new starts, adding to new starts in the effected areas.

At the same time, broader demand for home building services is likely to rise. According to Brad Hunter, chief economist at home services marketplace HomeAdvisor, project requests from homeowners in Harvey affected areas increased 78% in the last two weeks. Many are looking for services like roof repair, water removal, mold and toxic material testing, dumpster rentals, generator installs and orders, tree removal and window replacement. Companies are having trouble keeping up with all the demand.

"Overall, there is no question; the labor shortage in construction and remodeling just got worse," notes Hunter. "The back-to-back devastating hurricanes have exacerbated the already-existing labor shortages in the construction and remodeling industry, particularly in Florida, Texas, and South Carolina."

Nevertheless, economists expect housing overall to continue its long-term positive march. "The trend in housing starts should continue to be upward over the remainder of this year and in 2018, as housing demand rises -- boosted by the solid job market, wage gains that are edging higher, low mortgage rates, and accelerating household formations," says David Berson, chief economist at insurer Nationwide.