Housing starts fell 1.7 percent in August for the seventh straight monthly decline to the lowest level since the recession of 1982, the Commerce Department said this week.

"The numbers are obviously bad, but no worse than we expected in light of plunging consumer confidence, higher interest rates and ... the Iraqi crisis," said Daryl Delano, an analyst at Cahners Economics in Newton, Mass.

The latest drop, generally in line with analysts' forecasts, follows a revised decline of 3.5 percent in July and a revised decrease of 1.4 percent in June, according to the department's Census Bureau.

New building permits, an indicator of future construction activity, tumbled 4.3 percent in August after slipping 2.3 percent in July and gaining about 4 percent in June, the government said.

The figures were adjusted for seasonal factors.

A Commerce Department spokesman said August's 1.13 million housing starts, calculated at an annual rate, was the lowest since 1.05 million in August 1982.

Housing permits also hit the lowest level since August 1982, he said.

The last time housing starts scored seven consecutive monthly declines was from May to November 1981, the spokesman said.

"The current housing recession is likely to drift further downward in 1991," said Robert Sheehan, an economist at the National Apartment Association.

Construction of new single-family homes dropped 3.2 percent in August after falling a revised 2.4 percent in July -- to the lowest level since October 1982, the department said.

But David Seiders, chief economist at the National Association of Home Builders, said he anticipated an even poorer showing following Iraq's Aug. 2 invasion of Kuwait and the sharp increase in world oil prices.

"I was little relieved when I saw the numbers," he said. "It suggests {builders} didn't see widespread cancellation of sales contacts {and that} builders are really keeping their inventories under control.

"We're seeing a conservative approach by contractors, which is good, " Seiders said. "We're probably facing some further erosion into early 1991, but the bulk of the cyclical decline is behind us."

In the apartment sector, construction of dwellings with two, three and four units recovered 6.7 percent in August after diving a revised 28.6 percent in July, the Commerce Department said.

Construction of apartment buildings with five or more units, meanwhile, increased 2.4 percent in August after sliding a revised 3.5 percent during July, the department said.

By region, housing starts gained 8.2 percent in the Northeast in August after a 2.7 percent drop in July, increased 4.9 percent in the Midwest after slumping 7.5 percent, collapsed 10.7 percent in the South after a 7.5 percent drop, and advanced 4 percent in the West after a 6.7 percent gain.