U.S. housing starts dip,
permits maintain gains
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[June 17, 2016]
WASHINGTON - U.S. housing starts
slipped in May as the construction of multi-family housing units
dropped, but further gains in building permits suggested a rebound that
would continue to support economic growth in the second quarter.
Groundbreaking fell 0.3 percent to a seasonally adjusted annual pace of
1.16 million units, the Commerce Department said on Friday. Starts in
April were little changed at a 1.17 million-unit pace.
Economists polled by Reuters had forecast housing starts falling to a
1.15 million-unit pace last month.
Housing remains a pillar of strength for the economy.
Residential construction added almost a six-tenths of a percentage point
to first-quarter gross domestic product, the biggest contribution in
more than three years.
Groundbreaking on single-family homes, the largest segment of the
market, rose 0.3 percent to a 764,000-unit pace last month.
Single-family starts in the South, where most home building takes place,
rose 2.6 percent to their highest level since December 2007.
Single-family starts in the Northeast surged 12.7 percent.
In the West, groundbreaking on single-family housing projects rose 1.9
percent. But single-family starts in the Midwest tumbled 14.7 percent to
a six-month low.
Further gains in single-family starts are likely after a survey on
Thursday showed confidence among home builders rose to a five-month high
in June amid optimism over sales and buyer traffic. But single-family
home construction continues to run ahead of permits, which could limit
gains in the near term.
Housing starts for the volatile multi-family segment fell 1.2 percent to
a 400,000-unit pace. The drop followed an 11.9 percent jump in April.
The multi-family segment of the market continues to be supported by
strong demand for rental accommodation as some Americans remain wary of
homeownership in the aftermath of the housing market collapse.
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Workers install a roof on a multi-family building against the
backdrop of the Rocky Mountains in Broomfield, Colorado February 19,
2014. REUTERS/Rick Wilking
Multi-family home construction is also being aided by rising household formation
as a fairly strong labor market increases employment opportunities for young
Building permits rose 0.7 percent to a 1.14 million-unit rate last month.
Permits for the construction of single-family homes fell 2.0 percent last month
to a 726,000-unit rate, while multi-family building permits increased 5.9
percent to a 412,000-unit pace.
((Reporting by Lucia Mutikani; Editing by Paul Simao))
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