Housing starts increased in July by less than 1 percent to an annual rate of 1.17 million, per the Commerce Department, coming in under the target of 1.27 million forecasted by a poll of economists.
Housing starts in July were down 1.4 percent annually, while permits to build new homes were up 1.5 percent to a 1.31 million annual pace. Housing starts grew fastest in the Midwest and South, 11.6 percent and 10.4 percent, respectively, while new construction dropped in the West (11 percent) and Northeast (four percent). MarketWatch reports that this is a result of continued imbalance between supply and demand, "buyers have been clamoring for more houses and builders have suggested that they’re feeling fine. Yet none of that has translated into enough homes being built to keep prices down and satisfy the need of most buyers."
“We expected a much bigger rebound in starts after June’s surprise plunge – which was revised down – so this is disappointing,” said Ian Shepherdson, chief economist for Pantheon Macro. The uptick in single-family permits was a bright spot, Shepherdson said. “The bigger picture, though,is less encouraging. The trend in permits is flat, at best, and the downward trend in the NAHB index of homebuilder sentiment and activity suggests that no near-term recovery is likely. Housing is the sole weak spot in the economy right now, and that’s probably not going to change.”
