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Trumponomics Causes U.S. Housing Starts To Decline

May’s 0.9% drop is new sign of weakness in the housing market. Trumponomics Causes U.S. Housing Starts To Decline In May (#GotBitcoin?)

Trumponomics Causes U.S. Housing Starts To Decline In May (#GotBitcoin?)

A gauge of U.S. home building declined in May, a fresh sign of weakness in the housing market.

Housing starts fell 0.9% in May from the prior month to a seasonally adjusted annual rate of 1.269 million, the Commerce Department said Tuesday. That was a steeper decline than the 0.4% decrease economists had expected.

The report follows a drop in U.S. home-builder confidence in June, as builders reported concerns over rising construction costs and trade issues. The National Association of Home Builders housing market index fell to 64 this month from 66 in May, the trade group said Monday.

Tuesday’s housing data, “along with a constellation of other economic factors, could weigh on the Federal Reserve’s scales regarding whether or not they will cut rates, which would potentially provide some stimulus for the economy and the housing market,” said John Pataky, executive vice president at TIAA Bank.

Fed officials meet Tuesday and Wednesday in Washington, and are expected to deliberate whether to lower interest rates should the economic outlook darken.

There were some bright spots in the Commerce Department’s latest release. Residential building permits, which can signal how much construction is in the pipeline, rose 0.3% from April to an annual pace of 1.294 million. That was the strongest monthly rate of growth since December. The pace of starts in April was revised higher, another positive sign.

Housing-starts data are volatile from month to month and can be subject to large revisions. May’s 0.9% drop in starts came with a margin of error of 12.9 percentage points.

Home construction has been cooling more broadly as the overall housing sector has struggled with high prices and low inventory, even with a strong labor market and rising incomes. Starts were down 4.7% from May last year.

Borrowing costs have fallen in recent weeks, which could help the selling season this summer. A 30-year fixed-rate mortgage averaged 3.82% for the week ended Thursday, according to Freddie Mac, near historic lows and down from 4.62% a year ago. The National Association of Realtors will release existing-home sales data for May on Friday. Trumponomics Causes U.S. Housing, Trumponomics Causes U.S. Housing, Trumponomics Causes U.S. Housing, Trumponomics Causes U.S. Housing,Trumponomics Causes U.S. Housing,,Trumponomics Causes U.S. Housing,

 

Updated: 7-18-2019

U.S. Housing Starts Declined 0.9% In June

Residential building permits, which can signal how much construction is in the pipeline, dropped 6.1%.

Home building in the U.S. declined in June, a fresh sign of weakness in the housing market.

Housing starts, a measure of new-home construction, fell 0.9% in June from the prior month to a seasonally adjusted annual rate of 1.253 million, the Commerce Department said Wednesday.

Residential building permits, which can signal how much construction is in the pipeline, dropped 6.1% from May to an annual pace of 1.220 million. That was the biggest monthly drop since March 2016.

“Lower mortgage rates are not spurring the home building industry to increase construction, as lack of skilled workers, cheaper material costs and land zoned for building continue to hamstring production,” said Robert Frick, corporate economist at Navy Federal Credit Union, in a note to clients.

Economists surveyed by The Wall Street Journal had expected a 0.7% decrease for starts and a 0.3% decrease for permits.

Housing-starts data are volatile from month to month and can be subject to large revisions. June’s 0.9% decline for starts came with a margin of error of 7.9 percentage points.

Starts were up 6.2% from June last year. Building permits were down 6.6% from June 2018.

The overall housing sector has struggled with high prices and low inventory, even with a strong labor market, low borrowing costs and rising incomes.

The average rate on a 30-year, fixed-rate mortgage eased further in June to 3.73% in the final week of the month, according to Freddie Mac, the lowest rate since late 2016.

Cooling mortgage rates in recent months could be nudging the housing market toward a modest spring performance. Sales of previously owned homes rose 2.5% in May from the prior month, the National Association of Realtors said last month.

Updated: 8-18-2019

U.S. Housing Starts Fell 4.0% in July

The Northeast saw the sharpest dip.

Home building in the U.S. fell for a third straight month, showing that rising labor and material costs continue to dent the pace of home construction.

Housing starts, a measure of new-home construction, fell 4% in July from the prior month to a seasonally adjusted annual rate of 1.191 million, the Commerce Department said Friday.

Residential building permits, which can signal how much construction is in the pipeline, rose 8.4% from June to an annual pace of 1.336 million.

Economists surveyed by The Wall Street Journal had expected a 1.0% drop in housing starts and a 4.1% increase for permits last month.

Housing-starts data are volatile from month to month and can be subject to large revisions. July’s 4% decline for starts came with a margin of error of 8.0 percentage points.

Starts were up 0.6% from July last year and building permits were up 1.5% from July 2018.

The Northeast saw the sharpest dip in housing starts with a decline of 13.8% from June. Building permits were also down 3.3% from the previous month in the region.

Despite historically low mortgage rates and rising wages, the housing sector has been strained by a low inventory of affordable homes propelled by rising construction costs and lack of land.

Average rates for 30-year mortgages are at their lowest level in nearly three years, Freddie Mac said Thursday. The National Association of Home Builders also reported Thursday that builder confidence in the market for new single-family homes rose in August and said demand for homes, particularly at lower price points, is strong.

Home builders have struggled to keep up with demand, as the tight job market has created labor shortages, raised labor costs and prolonged construction. Tariffs on Canadian lumber and certain Chinese materials, like quartz and granite, have also made building materials more expensive.

 

 

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