Monday, 16 July 2018 06:56 GMT

Qatar- US homebuilding hits 4-month high supply constraints remain

(MENAFN - Gulf Times) US homebuilding surged to a four-month high in June, but construction activity remains constrained by rising lumber prices and labour and land shortages.
June's better-than-expected increase in housing starts ended three straight months of declines, offering hope that investment in homebuilding was only a modest drag on economic growth in the second quarter.
'A lack of workers is limiting the ability of builders to build, and input costs are also an issue, said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania.I don't expect this part of the economy to add greatly to growth going forward.
Housing starts jumped 8.3% to a seasonally adjusted annual rate of 1.22mn units, the highest level since February, as both single-family and multi-family construction rebounded after a recent slump, the Commerce Department said yesterday.
May' s sales pace was revised up to 1.12mn units from the previously reported 1.09mn units.
Economists had forecast groundbreaking activity rising to a 1.16 million-unit rate last month. Starts rose 2.1% on a year-on-year basis.
Building permits shot up 7.4% to a 1.25 million-unit rate in June, with approvals for the single-family housing segment snapping a three-month losing streak.
Permits for multi-family homes construction surged to a five-month high.
Despite last month's surge, homebuilding has lost momentum after strong gains in both the fourth and first quarters.
Starts are below their historic average of 1.5mn, a rate realtors say would eliminate an acute shortage of houses on the market, which has driven up prices.
'We expect the bidding wars to continue for the foreseeable future in many inventory-starved housing markets, said Joseph Kirchner, senior economist at
Supply bottlenecks are blamed for the slowdown.
A survey on Tuesday showed confidence among homebuilders hit an eight-month low in July amid complaints about high lumber prices and shortages of building lots and labour.
Lumber prices have surged after the government in April imposed anti-subsidy duties on imports of Canadian softwood lumber. The PHLOX housing index rose 0.60% on the homebuilding data, outperforming a modestly higher US stocks market.
Shares in the nation's largest homebuilder, D.R. Horton, climbed 0.24% and Pulverous advanced 0.86%.
The dollar rose against a basket of currencies, while prices for US government bonds fell.
The Atlanta Federal Reserve raised its second-quarter GDP estimate by one-tenth of a percentage point to a 2.5% annualised rate after the data.
The economy grew at a 1.4% pace in the first quarter.
Single-family homebuilding, which accounts for the largest share of the residential housing market, surged 6.3% to an 849,000 unit-pace last month, also a four-month high.
The sector has lost ground since vaulting to a near 9-1/2-year high in February, despite strong demand for housing, which is being driven by a labour market that is near full employment.
A separate report on Wednesday showed applications for loans to purchase a home rose 1% last week.
Single-family starts increased in the Northeast, South and West. They, however, fell in the Midwest.
Starts for the volatile multi-family housing segment increased 13.3% to a 366,000 unit-pace, after five straight months of declines.
Construction has slowed amid a jump in multi-family homes coming on the market.
Building completions surged 5.2% in June to their highest level since November 2016.
Completions of multi-family buildings with five units and more soared 17.9% also to a seven-month high.
There were 601,000 multi-family home units under construction in June.
'The rising supply has been boosting vacancy rates and slowing rent gains in major markets in the past couple years, said Ted Wieseman, an economist at Morgan Stanley in New York. 'That should result in a somewhat slower trend pace of multi-family starts.


Qatar-  US homebuilding hits 4-month high supply constraints remain

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