Housing starts declined 4.8 percent to a seasonally adjusted
annual rate of 1.16 million units, the Commerce Department said
on Wednesday. June's sales pace was revised down to 1.21 million
units from the previously reported 1.22 million units.
The report also showed a decline in building permits, suggesting
that residential construction could struggle to regain momentum
after contracting in the second quarter at its steepest pace
since the third quarter of 2010.
Economists polled by Reuters had forecast groundbreaking
activity to be little changed at a rate of 1.22 million units in
July. Homebuilding fell 5.6 percent on a year-on-year basis.
Single-family homebuilding, which accounts for the largest share
of the housing market, slipped 0.5 percent to a rate of 856,000
units last month.
Despite strong demand for housing, groundbreaking on
single-family housing projects has slowed since racing to near a
9-1/2-year high in February. Homebuilders continue to complain
they cannot find skilled labor, especially framers, and that
buildable lots remain in short supply.
Builders also say the costs of their materials are rising.
Prices for building materials were increasing even before the
U.S. government slapped anti-subsidy duties on imports of
Canadian softwood lumber in April.
A survey on Tuesday showed confidence among homebuilders
increased in August amid rising demand for new houses.
Last month, starts for the volatile multi-family housing segment
tumbled 15.3 percent to a rate of 299,000 units. Groundbreaking
for buildings with five units or more fell to its lowest level
since September 2016.
Multi-family home building is slowing as apartments come on the
market, leading to an increase in the rental vacancy rate this
Building permits last month fell 4.1 percent to a rate of 1.22
million units. Single-family home permits were unchanged, while
permits for the construction of multi-family homes plunged 11.2
percent in July.
(Reporting by Lucia Mutikani; Editing by Paul Simao)
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