US Housing Starts Rebounded in July on Single-Family Gain
Thursday, August 16, 2018
U.S. new-home construction rose less than forecast in July amid a rebound in groundbreaking for single- and multi-family houses, indicating the industry was trying to regain its footing at the start of the second half.
HIGHLIGHTS OF HOUSING STARTS (JULY)
- Residential starts increased 0.9 percent to a 1.17m annualized rate (est. 1.26m) after a downwardly-revised 1.16m pace in prior month, government figures showed Thursday
- Multifamily home starts rose 0.7 percent; single-family climbed 0.9 percent
- Permits, a proxy for future construction of all types of homes, rose 1.5 percent to 1.31m rate (matching est.) after 1.29m pace
A strong labor market, lower taxes and improved finances are providing support to demand for housing, which indicates that homebuilding will keep expanding, albeit at a slower pace.
Some 175,000 homes were authorized but not yet started in July, the most since February 2008, signaling that builders will stay busy in coming months.
Another encouraging sign was that single-family permits in the South were the highest since July 2007, the report showed.
At the same time, potential buyers are facing headwinds including rising property values and higher mortgage rates. For their part, builders remain limited by higher construction costs amid tariffs on imported materials including Canadian lumber. They also say they face shortages of qualified workers and ready-to-build lots.
In a separate report released by the Labor Department on Thursday, applications for jobless benefits fell by 2,000 to 212,000 in the week ended Aug. 11. Continuing claims dropped 39,000 to 1.72 million in the week ending Aug. 4, underscoring strength in demand for workers.
Category: Economic Development