Home construction starts are rising at the fastest pace since April

U.S. housing starts bounced back in August after falling a month earlier, illustrating uneven housing construction as builders weigh inventory levels against better demand prospects. to falling financing costs.

Start housing construction rose 9.6% last month to a year-on-year figure of 1.36 million, the fastest since April, according to government figures released on Wednesday. The average estimate of economists surveyed by Bloomberg called for an interest rate of 1.32 million euros.

The report shows that total building permits, a gauge of future construction, rose 5% to a figure of 1.48 million on an annual basis, while permits for single-family homes rose to the highest level in four months.

New single-family home construction rose nearly 16% to a pace of 992,000 annually, the fastest in three months. The number of multifamily housing project starts has fallen for the first time since May.

Builders are waiting for a continued surge in demand to complete a large number of unsold homes. Mortgage rates have fallen to their lowest level since 2022 on expectations that the Federal Reserve will ease monetary policy. This appears to support sales and help reduce inventory.

However, it will take some time before there is a consistent increase in housing construction. Although housing construction contributed to economic growth in the second half of 2023 and the beginning of this year, gross domestic product fell by 0.3 percentage points in the third quarter. prediction shown before the last start data.

In anticipation of an improving housing market, investors have favored shares of US builders. The iShares US Home Construction exchange-traded fund is up about 20% in the past three months and is at an all-time high.

Starts rose 15.5% in the South, a month after Hurricane Beryl led to the slowest construction pace in the region since mid-2020. Home construction also rose in the Midwest and West in August.

Completions of new single-family homes fell 5.6%, the slowest pace since March. The number of multi-family homes has increased enormously.

Housing market starts figures are volatile, with the government report showing 90% are confident the monthly change ranges from a 1.8% decline to a 21% gain.

On Thursday, the National Association of Realtors will release August data on existing home sales. Unlike new homes, the resale market is limited by a lack of inventory.