Housing starts slowed in July from a month earlier and came in below expectations, with weakness concentrated in the multi-unit sector, while building permits climbed and topped analysts’ views.
Privately owned home starts fell 4% to 1.19 million last month, while June’s figure was revised down to 1.24 million from 1.25 million earlier, the Census Bureau and Department of Housing and Urban Development said in a joint report on Friday.
The consensus on Econoday was for starts of 1.26 million.
Starts in buildings with five or more units were down 17% to 303,000 while single-unit developments were up 1.3% to 876,000, the data showed. In the northeast, starts fell 14% and were down 6.2% in the midwest. Starts fell 4.3% in the south and but were up 1.3% in the west, the data showed.
“One would imagine that in this era of low, and going lower, borrowing costs in the US, and lean inventories of existing homes available for sale, this would be an awesome time for the housing market,” said Jennifer Lee, a senior economist with BMO Capital Markets. “Shortages of land and labor are still a problem for builders, as well as higher material costs.”
Building permits rose 8.4% month-on-month to 1.34 million, better than the Econoday consensus for 1.27 million. Single-family authorizations were up 1.8% to 838,000 and multi-units surged 25% to 453,000.
Completions rose 7.2% to 1,25 million, the government data showed. Finished single-family homes rose 4.3% to 918,000 while completions of buildings with five or more units jumped 17%.
“The headline was startling; but, the details were better,” Lee said. “Nonetheless, the housing market struggles to gain momentum.”
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