By Lucia Mutikani WASHINGTON (Reuters) – U.S. homebuilding fell more than expected in July, the latest sign that surging construction costs and home prices continued to constrain the housing market early in the third quarter.
Though the report from the Commerce Department on Wednesday showed a rebound in building permits after three straight monthly declines, the gain was in the volatile multi-family home segment, which will do little to ease an acute housing shortage that is driving up prices.
The number of houses authorized for construction but not yet started last month was the third highest on record, indicating builders remained hesitant to undertake new projects.
“There is no question that home building has hit some sort of near-term ceiling, with surging home prices reducing affordability and leading to a record drop in the proportion of consumers that feel now is a good time to buy a home,” said Mark Vitner, a senior economist at Wells Fargo in Charlotte, North Carolina.
Housing starts dropped 7.0% to a seasonally adjusted annual rate of 1.534 million units last month. Data for June was revised up to a rate of 1.650 million units from the previously reported 1.643 million units. Economists polled by Reuters had forecast starts would fall to a rate of 1.600 million units… Read More