WASHINGTON - The pace of housing starts fell by 4.8% to a 1.155 million seasonally adjusted annual rate in July, well below expectations for a rise to a 1.220 million pace, data reported by the Commerce Department Wednesday morning showed.
There was a very slightly downward revision to the pace of starts in June to 1.213 million, following a modest upward revision in May to 1.129 million.
Housing starts of single-family homes fell by 0.5% in July after an 8.2% gain in the previous month. Starts of multi-family homes fell 15.3% after a 5.7% June increase, based on an MNI calculation.
The pace of unadjusted starts stands 5.4% below its year ago level, a sign that home building has slowed. However, the NAHB index for July rose sharply, so some rebound is possible for August.
Working against that, however, is a 4.1% drop in building permits and a flat reading for homes permitted but not started, leaving little backlog of homes to be started in the coming months. Single-family permits were flat while multi-family permits fell 11.2%.
July starts were down modestly from the 1.165 million average monthly rate in the second quarter, while permits were roughly unchanged from the 1.224 million second quarter average, suggesting home building will be a drag on 3Q growth without some improvement in the next few months.
