American Home-building hits Eight-month High in July

By Admin
US residential construction rebounded in July, growing 15.7 percent, the fastest pace in eight months and offering hope of regained momentum in the sect...

US residential construction rebounded in July, growing 15.7 percent, the fastest pace in eight months and offering hope of regained momentum in the sector after two months of declines.

The Commerce Department announced that construction hit a seasonally adjusted annual rate of 1.09 million homes, the fastest pace since November, following declines of four percent in June (945,000) and 7.4 percent in May.

Applications for building permits, considered a good sign of future activity, also advanced 8.1 percent to an annual rate of 1.05 million, after declines of 3.1 percent in June and 5.1 percent in May.

The July rebound reflected strength in single-family home construction- up 8.3 percent- and apartment construction, which rose 33 percent.

July’s strong performance was led by a 44 percent rise in construction starts in the Northeast. Housing construction was up 29 percent in the South, recovering from a fall of 26.8 percent the previous month which has been attributed to heavy rain in the region. Sales rose 18.6 percent in the West but fell 24.8 percent in the Midwest.

Economists were surprised by July’s performance and June was revised significantly higher: from a 9.3 percent decline to just a 3.9 percent drop.

Sal Guatieri, Senior Economist at BMO Capital Markets, said solid job growth and a recent decline in mortgage rates had helped boost construction, however added that weak wage growth and tight lending standards were still depressing activity, particularly among first-time buyers.

Americans, unable to afford to buy new homes, are renting more, showing that the country’s economy continues to struggle as it emerges from the financial crisis. Economists estimate that in a normally-functioning economy, the US would be building about 1.7 million new homes a year.

Share

Featured Articles

How to lead a successful EDI migration process

Software developer Comarch, which has over 20 years of experience in data management, shares tips on the potentially challenging EDI migration process

Changing EDI provider & how to find the right one

How to find the right EDI provider for your business

Tinamu drone automation revolutionises inventory management

Swiss firm Tinamu transform building material inventory management with Automation and Drone Technology and redefine stockpile volume measurement

COBOD's BOD2 3D printer used to build a school in Ukraine

Construction Projects

All you need to know about Saudi real estate developer ROSHN

Construction Projects

Arcadis signs collaboration with Canadian start-up Niricson

EPC