Building of single-family units in the United States, roughly two-thirds of the market, fell a modest 2.4 per cent in August, Commerce Department figures showed Thursday. Home construction fell last month after surging to a post-recession high in July, a sign of choppy progress in the housing market.
Total US housing starts fell 14.4 per cent in August from a month earlier to a seasonally adjusted annual rate of 956,000 units. The sharp drop partly reflected a robust July, when residential construction rose 22.9 per cent to a pace of 1.12 million units, the highest level since November 2007, revised figures show. The agency had previously estimated starts rose 15.7 per cent in July from June.
Building permits fell 5.6 per cent in August after rising 8.6 per cent in July.
Work on apartments and condominiums, which tends to be volatile, dropped 31.7 per cent after jumping 44.9 per cent in July.
Separately, data showed construction spending rebounded strongly to hit its highest level in more than 5-1/2 years in July as private construction increased and state and local government outlays surged, a further sign of vigor in the economy.
Construction spending increased 1.8 per cent to an annual rate of US$981.31 billion, the highest level since December 2008, the Commerce Department reported.
July’s percentage increase was the largest since May 2012 and reflected gains across all categories, with the exception of federal government.
It followed June’s revised 0.9 per cent decline.
US Housing Starts
Sales of previously owned homes-the bulk of the market-have climbed steadily this summer after falling late last year and this winter, according to the National Association of Realtors. Sales of newly built homes fell in June and July, Commerce Department figures show. Many families also continue to rent, driving up apartment construction.
Over the past 12 months, construction has been started on an average of 349,000 multifamily structures, the most since the same period ended July 2006
Home construction remains below the pace of the 1990s and mid-2000s, and the outlook for the market remains murky.
Starts of single-family properties averaged 630,000 over the past 12 months. While that’s up from the depths of the economic slump, excluding the recession and subsequent recovery, the reading would be the weakest since 1982.
The Federal Reserve reaffirmed Wednesday that it plans to end its bond-buying program next month; the program was designed to push down long-term interest rates and stimulate spending and investment, including home sales.