New housing starts lower than expected in July

Here in Arizona we are starting to see new builders back, our permits are up in the Valley of the Sun, but for most of the country, the numbers are down with permits on new builder, as you can see in this article. Here in Arizona, our inventory has been exceptionally low and that is one reason why our new builders here in the valley of the Sun have been so successful.  If you are looking to move to Arizona and need additional information on new builds or resale homes, feel free to call, email, or fill out the form below.
New housing starts lower than expected in July
U.S. housing starts and permits for  future home construction rose less than expected in July, suggesting  that higher mortgage rates could be slowing the housing market’s  momentum, while non-farm productivity rose in the second quarter as  output increased more than hours worked, U.S. government reports showed  Friday.

The Commerce Department said that  housing starts increased 5.9 percent to a seasonally adjusted annual  rate of 896,000 units. June’s starts were revised up to show a  846,000-unit pace instead of the previously reported 836,000 units.

Economists polled by Reuters had expected groundbreaking to rise to a 900,000-unit rate last month.

Permits to build homes rose 2.7 percent in July to a 943,000-unit  pace. Economists had expected permits to rise to a 945,000 unit pace.

Meanwhile, productivity increased at a 0.9 percent annual rate, the  Labor Department said. Economists polled by Reuters had expected  productivity to gain at a 0.6 percent rate.

Productivity fell at a 1.7 percent rate in the first quarter, compared to an earlier estimate of a 0.5 percent gain. Output rose at a 2.6 percent rate in the second quarter, while the  number of hours worked increased at a 1.7 percent rate.   Unit labor costs—a gauge of labor-related costs for any given unit of  output—rose at 1.4 percent rate in the second quarter, slightly above  forecasts of economists polled by Reuters.

Mortgage rates  have spiked in anticipation of the Federal Reserve tapering its monthly  bond purchases as early as next month. The residential construction  figures last month could also be a reflection of supply constraints.

Builders have been complaining about a shortage of labor and  materials. Still, residential construction remains on a firmer footing  and should again contribute to economic growth this year.

A  report on Thursday showed confidence among single-family home builders  neared an eight-year high in August, with builders fairly upbeat about  sales prospects over the next six months.

Last month,  groundbreaking for single-family homes, the largest segment of the  market, fell 2.2 percent to a 591,000-unit pace, the lowest level since  November last year. Starts for multi-family homes jumped 26 percent to a  305,000-unit rate, reversing the prior month’s decline.

Permits for multi-family homes rose 12.6 percent to a 330,000-unit rate.  Permits for single-family homes fell 1.9 percent to a 613,000-unit  pace.

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