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News Aug. 19, 2019

Housing starts fall in July

Construction on new houses fell 4% in July to the second-lowest rate this year, but builders applied for more permits, boosting optimism regarding the housing market, according to marketwatch.com.

Housing starts dropped to an annual rate of 1.191 million in July from a revised 1.241 million in June. Economists polled by MarketWatch had anticipated a 1.25 million rate.

Permits to build additional properties increased 8.4% to a seasonally adjusted annual pace of 1.336 million from June’s revised rate of 1.232 million. Economists expected a rate of 1.29 million.

Multi-dwelling projects of five or more units dropped 17.2% compared with a 1.3% increase for single-family homes, which account for most new construction. This was the highest rate of new single-family construction since January.

The decline of mortgage rates during 2019 has not yet prompted a significant boom for the home-buying market, though it reportedly may be helping to ease affordability constraints for some Americans.

Homebuilders continue to face challenges such as the construction labor shortage, expensive land and ongoing tariff disputes that have raised construction material prices.

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