(MENAFN- Khaleej Times) New-home construction in the US climbed in July, reflecting a rebound in multifamily projects that overshadowed a slowdown in single-family properties.
Housing starts climbed 5.9 per cent to an 896,000 annualised rate from a revised 846,000 pace in June that was higher than previously reported, figures from the Commerce Department showed on Friday in Washington. The median estimate of 82 economists surveyed by Bloomberg was for a 900,000 rate. Multifamily construction surged 26 per cent, while work began on 2.2 per cent fewer single-family homes.
Builders may be limiting supply amid a shortage of lots and materials as they try to boost prices and revenue in an industry that has supported growth. Further gains in employment will be needed to help sustain demand and make up for the jump in interest rates that is hurting affordability.
"Things are still far better than they were a year ago, but it feels like progress has stalled out for a little while," said Stephen Stanley, chief economist at Pierpont Securities in Stamford Connecticut, who projected starts would rise to a 900,000 pace.
Builders will eventually "expand operations, they'll hire workers and get more aggressive. At the moment they're happy to keep the market tightly supplied because that allows them to raise prices".
Another report on Friday showed the productivity of US workers rose in the second quarter, rebounding from the biggest back-to-back declines since 1993. The measure of employee output per hour increased at a 0.9 per cent annualised rate after 1.7 per cent decreases in each of the prior two quarters, according to Labour Department data. Stock-index futures held earlier gains after the report. The contract on the Standard & Poor's 500 Index maturing in September climbed 0.1 per cent to 1,658 in early New York trading.
Estimates for housing starts in the Bloomberg survey ranged from 815,000 to 1.05 million following a June pace that was first reported as 836,000.
Building permits climbed 2.7 per cent in July to a 943,000 annualised rate, again paced by a jump in multifamily. They were projected to rise to 945,000 within a range of 885,000 to 1 million, after a previously reported reading of 918,000.
Building applications for single-family projects exceeded the number of starts, signaling some scope for a pickup in construction in coming months.
Construction of single-family houses decreased to a 591,000 rate, the fewest since November, Friday's report showed. Work on multifamily homes, such as apartment buildings, climbed to a 305,000 rate. Work on these projects is often volatile, with last month's surge following a 24.8 per cent plunge in June.
Three of four regions had an increase in starts last month, led by a 40.2 per cent jump in the Northeast, according to the report. Construction dropped seven per cent in the South. On a year-to-year basis, total housing starts were up 20.9 per cent in July.
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