US Housing Starts Rise Strongly in July

U.S. housing starts and building permits rebounded strongly in July, suggesting the housing market recovery was back on track after stalling in the second half of last year.

Groundbreaking surged 15.7 percent to a seasonally adjusted annual 1.09-million unit pace, snapping two straight months of declines, the Commerce Department said on Tuesday.

June’s starts were revised to show a 945,000-unit pace instead of the previously reported 893,000-unit rate.

Economists polled by Reuters had expected starts to rise to a 969,000-unit rate last month.

The housing market is regaining its footing after being slammed by last year’s run-up in interest rates. A shortage of properties for sale has also lifted prices, pushing housing out of the reach of many first-time buyers.

Groundbreaking for single-family homes, the largest part of the market, increased 8.3 percent in July to a 656,000-unit pace. Single-family starts in the South rebounded 16.9 percent last month after dropping sharply in June.

Starts for the volatile multi-family homes segment jumped 33 percent to a 423,000-unit rate, the highest level since January 2006. This market segment is being buoyed by a shift towards renting, as many prospective buyers give up on the dream of owning a house.

The government reported last month that the homeownership rate hit a 19-year low in the second quarter, while the rental vacancy rate was the lowest in more than 19 years.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency
trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza