Housing Starts in U.S. Fall as Permits Reach Four-Year High [View all]
By Shobhana Chandra - Aug 16, 2012 8:45 AM ET
New-home construction in the U.S. fell in July, while the number of building permits jumped to the highest level in four years, indicating the industry will keep improving in the second half of the year.
Starts fell 1.1 percent to a 746,000 annual rate from June’s 754,000 pace, Commerce Department figures showed today in Washington. The median estimate of 79 economists surveyed by Bloomberg News called for 756,000. Building permits, a proxy for future construction, rose to an 812,000 pace, the most since August 2008.
Less costly properties combined with record-low mortgage rates are reviving demand, helping builders like PulteGroup Inc. (PHM) boost profits. A drop in foreclosures, increased hiring and easier access to credit may be required to foster a more pronounced and sustained rebound in the industry that triggered the recession.
“It looks like things have turned up for housing,” said Brian Jones, a senior U.S. economist at Societe Generale in New York, whose permits forecast of 805,000 was the highest in the Bloomberg survey. “We are moving in the right direction. We are coming off such a low base that we still have a long ways to go.”