Housing starts exceeded expectations in July, primarily due to strong demand for multifamily units, with a seasonally adjusted annual rate of 1,428,000. This represents an increase of 5.2 percent from June. Conversely, housing permits fell to a cycle low of 1,354,000, reflecting struggles in the residential construction sector, including job losses. There are hopes that decreasing mortgage rates could eventually benefit single-family construction. Current trends show a concerning decline in residential construction jobs, which may impact the broader economy, despite possible recovery strategies.
Privately-owned housing starts in July were at a seasonally adjusted annual rate of 1,428,000, which is 5.2 percent above the revised June estimate. Meanwhile, permits hit a cycle low at 1,354,000.
The report indicates that while housing demand for multifamily units is strong, job losses in the residential construction sector are concerning and contributed to low building permits.
Increasing housing starts suggests an improvement in supply, with lower mortgage rates potentially stimulating the single-family construction sector, despite challenges due to higher rates.
Monitoring the labor market for residential construction workers shows a downward trend, posing risks for the economy, but there are reversals possible that deserve attention.
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