U.S. Building Permits Fell 0.1% in July
August 16 2016 - 9:20AM
Dow Jones News
WASHINGTON—Housing starts rose in July but building-permit
issuance fell slightly, a possible sign of caution ahead among home
builders despite historically low interest rates for home
buyers.
Building permits issued for privately owned housing units ticked
down 0.1% in July from the prior month to a seasonally adjusted
annual level of 1.152 million, the Commerce Department said
Tuesday. Permits had risen the prior three months. Construction
typically starts within a month or two of a permit being
issued.
Permits for residential construction fell 2.2% in the first
seven months of 2016 compared with a year earlier, reflecting a
7.2% increase in permits for new single-family homes that was
offset by weakness in the multifamily category.
Housing starts last month rose 2.1% from June to an annual rate
of 1.211 million, slower than June's 5.1% gain. Starts in July
remained just below their February level of 1.213 million.
Through July, starts in 2016 were up 6.7% from 2015, with
strength in single-family construction offsetting a decline in
apartment-building construction.
Economists surveyed by The Wall Street Journal had expected July
permits at a 1.16 million annual rate and July starts at a 1.18
million pace.
Data on housing starts can be volatile from month to month and
the figures are subject to later revision. Last month's 2.1% rise
in starts came with a margin of error of 8.8 percentage points. The
0.1% fall for permits had a margin of error of 1.2 percentage
points.
The housing sector this year has continued its long
postrecession recovery. Sales of previously owned homes in June
rose to their strongest pace since February 2007, according to the
National Association of Realtors. New-home sales, which account for
only about 10% of homebuying activity, rose 10.1% in the first half
of 2016 compared with a year earlier.
Still, tight inventory remains a worry, and home sales may
soften in the second half of the year. "We may just have hit peak
levels," National Association of Realtors chief economist Lawrence
Yun said last month.
News Corp, owner of The Wall Street Journal, also owns Move
Inc., which operates a website and mobile products for the National
Association of Realtors.
Interest rates remain at low levels, a boon for potential home
buyers. The average rate on a 30-year fixed-rate mortgage in July
was 3.44%, compared with 4.05% in July 2015, according to Freddie
Mac.
The housing recovery provided a tailwind for overall U.S.
economic growth through most of 2014, 2015 and early 2016. But a
drop in residential fixed investment shaved 0.24 percentage point
off the second quarter's 1.2% annual growth rate for gross domestic
product, the Commerce Department said last month.
The Commerce Department's July report on new-home sales is due
out on Aug. 23 and the Realtors group will release data on
existing-home sales during July on Aug. 24.
Write to Ben Leubsdorf at ben.leubsdorf@wsj.com and Eric Morath
at eric.morath@wsj.com
(END) Dow Jones Newswires
August 16, 2016 09:05 ET (13:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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