Housing starts unexpectedly rose
Todd Korol/Reuters
New residential construction surprised on the upside, according to the Census Bureau.
Housing starts jumped 2.1% at a seasonally adjusted annual rate of 1.211 million.
This is only the third time starts have been higher than 1.2 million since the Great Recession, according to data from FRED.
Meanwhile, economists had been expecting starts to fall 0.8% month-over-month at a seasonally adjusted annual rate of 1.180 million.
"Housing stars grew respectably in July, but the rate is slowing. The 12-month rolling total sits at 80% of the 50-year average," observed Ralph B. McLaughlin, Chief Economist at Trulia.
"The wave of single-family starts this year still isn’t showing signs of rising the tide for construction jobs. The number of construction jobs per housing starts hit a 10-year low in July, likely due to persistent labor shortages,” he added.
"This is a strong report, and we are particularly pleased with the single-family segment. We believe that growth in housing starts will be led by single-family homes," wrote Tian Liu, Genworth Mortgage Insurance Chief Economist, after the report.
"Single-family homes have experienced a slower recovery in the past few years, and remain under-supplied today. We expect supply of single-family homes to catch up over the next few years.”
However, building permits fell 0.1% at a rate of 1.152 million. Economists had forecast that they ticked up 0.6% month-over-month in July to a seasonally adjusted rate of 1.160 million.