US single-family housing starts slide in July
Higher mortgage rates and an elevated supply of unsold homes kept builders cautious as total housing starts also dropped 12.4%, the Census Bureau said.
- On Tuesday, the Commerce Department's Census Bureau reported single-family housing starts dropped 9.9% to 808,000 units in July, while total starts fell 12.4% to 1.239 million.
- High mortgage rates near 6.77% and economic uncertainty keep prospective buyers sidelined, while elevated inventory at 9.3 months of supply discourages builders from increasing production.
- Despite the decline in starts, overall residential construction permits rose 5.0% to 1.443 million units in July, with single-family authorizations increasing 1.1% to 894,000.
- First American Deputy Chief Economist Odeta Kushi argued there is "a silver lining in the permits data," as "permits tend to lead actual construction," though builders will likely remain cautious.
- Builders face potential cost increases as oil prices rebound, with prices for lumber, iron, and steel continuing to rise, aggravated by the U.S.-led war with Iran.
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According to data from the Department of Commerce's Census Bureau, the decline in the construction sector is one of the lowest levels in three years.
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