U.S. housing starts,
building permits fall in August
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[September 20, 2016]
WASHINGTON (Reuters) - U.S. housing
starts fell more than expected in August as building activity declined
broadly after two straight months of solid increases, but a rebound in
permits for single-family dwellings suggested demand for housing
remained intact.
Groundbreaking decreased 5.8 percent to a seasonally adjusted annual
pace of 1.14 million units, the Commerce Department said on Tuesday.
July's starts were unrevised at a 1.21 million-unit pace.
Permits for future construction slipped 0.4 percent to a 1.14
million-unit rate last month as approvals for the volatile
multi-family homes segment tumbled 7.2 percent to a 402,000
unit-rate. Permits for single-family homes, the largest segment of
the market, surged 3.7 percent to a 737,000-unit pace.
Economists polled by Reuters had forecast housing starts falling to
a 1.19 million-unit pace last month and building permits rising to a
1.17 million-unit rate.
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Last month's decline in starts was largely anticipated as
groundbreaking activity has been running well ahead of permits
approvals over the past several months, especially in the
single-family housing segment. The drop left starts just below their
second-quarter average.
Economists expect that residential construction will contribute to
economic growth in the third quarter after being a small drag on
output in the April-June period.
Demand for housing is being driven by a tightening labor market,
which is lifting wages. A survey of homebuilders published on Monday
showed confidence hitting an 11-month high in September, with
builders bullish about current sales now and over the next six
months, as well as prospective buyer traffic.
Groundbreaking on single-family homes dropped 6.0 percent to a
722,000-unit pace in August, the lowest level since last October.
With permits for the construction of single-family homes rising last
month, single-family home building could rebound in the month ahead.
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![](../images/092016pics/busine61.jpg)
Roofers work on new homes at a residential construction site in the
west side of the Las Vegas Valley in Las Vegas, Nevada April 5,
2013. REUTERS/Steve Marcus
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The single-family housing market is being supported by a dearth of previously
owned homes available for sale. Single-family home construction tumbled 13.8
percent in the Northeast and dropped 13.1 percent in the South. Starts rose
strongly in the West and Midwest.
Housing starts for the volatile multi-family segment
fell 5.4 percent to a 420,000-unit pace. The multi-family segment of the market
has been buoyed by strong demand for rental accommodation as some Americans shun
homeownership in the aftermath of the housing market collapse.
Momentum could slow with rents appearing close to peaking and rental vacancy
rates bottoming.
(Reporting by Lucia Mutikani; Editing by Andrea Ricci)
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