Number: US new home construction increased 12.2% seasonally to 1.58 million in August. the Department of Commerce said on Tuesday.
The rise in housing construction reverses a sharp July decline in housing starts, which fell by a revised 10.9%.
Economists polled by The Wall Street Journal expected housing to start rising to 1.5 million from an initial estimate of 1.45 million in June.
The gross housing start rate fell from 0.1% a year earlier.
June housing starts were revised down to a sharp 10.9% decline from a previous decline of 9.6%.
Building permits for new homes fell 10% to 1.52 million in August.
Economists had expected construction permits to fall to 1.62 million from an initial estimate of 1.69 million in June.
Key details: On an unadjusted basis, housing starts rose 11.4% in August after a 13% decline in July.
The pace of single-family home construction rose 3.4% in August, while apartments rose 28.6%.
Permits for single-family homes fell 3.5% in August, while permits for buildings with five or more units fell 18.5%.
Regionally, residential construction surged in the Midwest and South. In the West, housing starts increased slightly by 1.1%. The Northeast experienced a sharp decline of 17.3%.
Single-family home construction in the Midwest soared with a 20.8% increase.
Big picture: The increase in construction reverses the sharp decline in housing starts in July, but starts only return to June levels.
The number of starts is much lower than the 1.81 million level seen in April.
Overall, economic data reflecting conditions in the housing market were weak. Although the number of starts increased, permits decreased by 10%, indicating a decline in future projects.
And even the increase in housing starts may be short-lived. continue to be pessimistic In the short term, it suggests further declines in the housing sector.
Outside of the pandemic, builder confidence is at its lowest level in eight years.
Weak buyer demand and rising construction costs are weakening buyer confidence. Soaring interest rates and soaring home prices are discouraging buyers who feel they can’t afford to buy.
Nationally, the homeownership rate as of June this year was Atlanta Fed began monitoring data in 2006. The median selling price for new homes was $439,400. in July, According to the U.S. Census Bureau. The result is slowing business for sellers and builders and a prolonged housing recession.
what are they saying? “Housing starts rebounded in August, completely reversing July’s sharp decline … certainly signaling that all is well for the housing sector,” said Steven Stanley, chief economist at Amherst Pierpont Securities. I don’t think so,” he said. client.
“Activity is likely to remain subdued, at least as long as mortgage rates continue to rise,” he added. “Nevertheless, it’s good that the July plunge exaggerated the extent of potential weakness.
market reaction: US stocks
It opened lower after the market opened on Tuesday. 10 year government bond yield