US housing starts slide for third consecutive month
The rate of US new home construction fell by the most in five months in July, led by apartments, despite lower mortgage rates, data on Friday showed.
New housing starts fell 4 per cent month-on-month to an annualised pace of 1.191m, the Census Bureau said. That compared with expectations for an increase to 1.257m, according to a Reuters poll. Data for June were revised lower to reflect a 1.8 per cent decline and with July’s drop, marking the third consecutive monthly slide.
The weakness in housing comes despite a drop in the 30-year fixed mortgage rate to about 3.8 per cent last month, according to Freddie Mac, down from a peak of 4.9 per cent in November.
“Scarce land and high labour costs have plagued builders for much of the year, factors that have been exacerbated by unrelenting uncertainty in the global markets,” said Zillow economist Matthew Speakman.
“This week’s flare-up, with bond markets flashing recession warnings, does not provide fertile ground for new housing investment,” he added.
The report also showed permits to build new homes exceeded expectations, rising 8.4 per cent from the previous month to an annualised pace of 1.336m, ahead of forecasts for 1.27m.