New housing construction rose in August, boosted by the strongest pace of single-family home starts in more than two years that shows an improving U.S. real estate market.
Beginning construction climbed 2.3 percent to a 750,000 annual rate, less than forecast and restrained by a drop in the building of apartments, from a revised 733,000 annual pace in July, Commerce Department figures showed today in Washington. The median estimate of 85 economists surveyed by Bloomberg called for 767,000. Building permits cooled.
Mortgage rates near all-time lows and cheaper properties are driving sales at companies like Toll Brothers Inc. (TOL) and propelling construction, one of the economy’s few sources of strength. Tighter credit standards and unemployment above 8 percent for the last three years are hurdles for the industry.
“The residential construction industry continues to improve through year-end on low housing inventories and rising demand,” said Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia. “Home sales are improving slightly and low mortgage rates certainly make housing far more affordable.”