The numbers: A persistent lack of listing for the sale of existing homes has pushed more home buyers to consider newly built homes, prompting home builders to ramp up construction of new U.S. homes in July.
Construction rose 3.9% that month as home builders sought to fill Americans’ need for homes.
So-called housing starts rose to a 1.45 million annual pace from 1.4 million in June, the government said Wednesday. That’s how many houses would be built over an entire year if construction took place at the same rate in every month as it did in July.
Housing starts are down from a peak of 1.8 million in April 2022.
The July data was in line with expectations on Wall Street. Economists on Wall Street were expecting an increase in starts to 1.45 million. All numbers are seasonally adjusted.
The number of homes started in June was heavily revised downwards, to a drop of 11.7% to 1.44 million, from an initial reading of a drop of 8%. The drop in June was the biggest in a year.
Strong interest from aspiring homeowners is boosting builders’ business, as buyers face a lack of options in the resale market, but with mortgage rates remaining high, that may dampen home-buying demand further, which could hurt home buyers in the upcoming months.
Single-family construction led in July, while multi-family was flat. The increase in construction activity in July was led by the West, where builders reported a 28.5% increase in single-family home starts.
Building permits, a sign of future construction, rose 0.1% to a 1.44 million rate.
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Source:
ENB
Sandstone Group
