Last Update: 16-Aug-13 09:44 ET
Housing Starts Rebound on Strength in Multifamily Construction
Housing starts rebounded in July, increasing 5.9% to 896,000 from an upwardly revised 846,000 (from 836,000) in June. The Briefing.com consensus expects housing starts to increase to 895,000. The jump in starts came entirely from the volatile multifamily sector. Multifamily housing starts rose 26.0% to 305,000 from 242,000 in June. Multifamily construction has been running hotter than its long term trend and will likely pullback slightly in August. Surprisingly, single family housing starts fell to 591,000 in July from 604,000 in June. Home builders reported that low inventory levels were negatively impacting housing sales. Thus, many analysts expected single family construction levels to surge over the next few months in order to alleviate the inventory problem. That did not happen. It seems that builders are concerned that raising mortgage rates may soften future demand. By keeping production levels steady, builders will prevent a glut of inventories from coming on-line at the start of 2014. If demand remains constant amid increasing interest rates, however, the lack of new construction means that low supply will constrain sales growth until at least the middle of next year. The number of units under construction rose 2.1% to 636,000 in July from 623,000 in June. That is a positive for third quarter GDP growth.
Housing starts rebounded in July, increasing 5.9% to 896,000 from an upwardly revised 846,000 (from 836,000) in June. The Briefing.com consensus