Data show builders had a difficult August, although permits rise
By Jeffry Bartash, MarketWatch
WASHINGTON (MarketWatch) — Builders started construction on fewer new homes in August, government data showed Tuesday, underscoring how the depressed U.S. real estate market shows little sign of recovering.
Housing starts fell 5% to an annual rate of 571,000 last month, compared with a downwardly revised 601,000 in July, the Commerce Department said.
Economists surveyed by MarketWatch had expected housing starts to fall to 590,000 on a seasonally adjusted basis.
In the housing report’s only bright spot, permits for new construction actually rose 3.2% to an annual rate of 620,000, marking the highest level since January. Permits give an indication of whether demand for new homes is growing or slowing.
Also, single-family permits climbed 2.5% to 413,000, the best showing since December.
Yet the residential construction industry remains mired in its worst slump in modern times: New homes are selling at about half the rate as would be the case in a healthy housing market.
Among the factors depressing sales are a persistenly high jobless rate, a flood of foreclosures and the difficulty that both builders and prospective buyers face in trying to get financing from cautious lenders.
Buyers can also get a much lower price by choosing a previously owned home.
New construction of single-family homes, which account for three-quarters of the housing market, dipped 1.4% in August to an annual rate of 417,000.
Construction of single-family homes are 2.3% lower compared to year ago, the government’s data indicated.
Jeffry Bartash is a reporter for MarketWatch in Washington.
