U.S.
housing starts fall to seven-month low, permits rise
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[November 18, 2015]
WASHINGTON (Reuters) - U.S. housing
starts in October fell to a seven-month low as single-family home
construction in the South tumbled, but a surge in building permits
suggested the housing market remained on solid ground.
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Groundbreaking dropped 11 percent to a seasonally adjusted annual
pace of 1.06 million units, the lowest level since March, the
Commerce Department said on Wednesday. September's starts were
revised down to a 1.19 million-unit pace from 1.21 million units.
Still, October marked the seventh straight month that starts
remained above 1 million units, the longest stretch since 2007.
That suggested a sustainable housing market recovery.
Rapidly rising household formation, mostly driven by young adults
leaving their parental homes and a strengthening labor market, is
supporting the housing sector.
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Although residential construction accounts for just over 3 percent
of gross domestic product, housing has a broader reach in the
economy, with rising home prices boosting household wealth and, as a
result, supporting consumer spending.
Housing has contributed to GDP growth in each of the last six
quarters and is absorbing some of the slack from a weak
manufacturing sector.
Economists polled by Reuters had forecast housing starts falling to
a 1.16 million-unit pace last month.
Groundbreaking on single-family home projects, the largest segment
of the market, fell 2.4 percent to a 722,000-unit pace.
Single-family starts tumbled 6.9 percent in the South, where most
home building takes place. Single family starts, however, rose in
the Northeast, the Midwest and the West.
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Starts for the volatile multi-family segment plunged 25.1 percent to
a 338,000-unit pace.
Building permits increased 4.1 percent to a 1.15 million-unit rate
last month. Single-family building permits rose 2.4 percent last
month to their highest level since December 2007. Single-family
permits in the South also hit their
highest level since December 2007.
Multi-family building permits increased 6.8 percent.
(Reporting by Lucia Mutikani; Editing by Paul Simao)
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