Housing Starts

U.S. housing starts grew 1.7% in July.  Construction on new homes rose to a seasonally adjusted 546,000 annual rate following June's reading (revised lower by 12,000 to 537,000).  Economists estimated that starts would climb to 555,000.  Multi-family home construction surged by 33% last month.  Applications for building permits, an indicator of future construction activity, decreased by 3.1% to a 565,000 annual pace from June’s downwardly revised 583,000 reading.  The reading was the lowest level seen since May of 2009.

Summary: Since the expiration of the first-time home buyer tax credit in April, housing starts have remained subdued and building permits have fallen to the lowest level in over a year.  Without government assistance, the housing market is likely to struggle in coming months.

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