Housing Starts Gain 2.1% in July, Builder Confidence on Upswing
Single-family starts edged up 0.5% to a 770,000 annual pace.
WASHINGTON – Housing starts in the U.S. increased in July to the fastest pace in five months, while building permits dipped slightly from the previous month’s rate for the third consecutive time, according to data released Tuesday by the Commerce Department. Still, both indicators regained a positive year-over-year status.
Residential starts increased 2.1% to a seasonally adjusted annual rate of 1.211 million, besting analysts’ consensus estimates of 1.18 million. The June estimate was revised down from 1.189 million units to 1.186 million. On a year-over-year basis housing starts recovered from a 2% deficit in June to a 5.6% in July.
Single family starts edged upward by 0.5% from June to a seasonally adjusted rate of 770,000 and were up 1.3% from July 2015. Construction was initiated on multifamily units at a 433,000 annual rate, up 8.3% and 15.2% on a monthly and annual basis.
Building permits, an indicator of future housing demand, for residential construction were issued at a seasonally adjusted annual rate of f 1.152 million in July, a 0.1% decrease from the annual rate in June. A drop in permits for single-family construction – issued at a rate of 711,000, a decline of 3.7% from June – dragged down the overall total. Multifamily construction permits rose 6.5% from June to a rate of 411,000 units, 1.7% lower than the previous year.
Housing starts climbed in three of four regions, paced by a 3.5% gain in the South and a 2.3% increase in the Midwest. Construction was up 15.5% in the Northeast and down 5.9% in the West.
On Monday, the National Association of Home Builders said builder confidence for newly constructed single-family homes in August rose two points to 60 from a downwardly revised reading of 58 in July.
“Builder confidence remains solid in the aftermath of weak GDP reports that were offset by positive job growth in July,” said NAHB Chief Economist Robert Dietz. “Historically low mortgage rates, increased household formations and a firming labor market will help keep housing on an upward path during the rest of the year.”
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