In a lone bright spot after a series of news connected to Trump's tariffs and China's retaliation, home construction in the US got a slightly unexpected boost. An increase of 9.2 percent in housing starts gave the housing market a positive sign, especially after an economy that's hardly been kind to domestic markets.
August was a great month, as the increase attested to the measurement-about 1.282 million units were completed in August, the Commerce Department highlighted. CNBC stated that an expected unit of 1.235 million units has been expected by analysts from Reuters. The result had been a far cry from expected outputs of 1.174 million housing starts.
The tricky part of US housing data is that it's fluid; it can be revised and these revisions are usually large. The case with August is that the housing starts' gain was in the multi-family sector, a particularly temporary sector in terms of starts. The ratings for multi-family building starts have been rated at 29.3 percent, or about 406,000 units annually.
Single-family builds, meanwhile, have been at 1.9 percent or a number of 876,000 units in August. However, a more stable indicator of building starts is building permits. These tend to create a better indicator when predicting the true value of construction volumes. When these are measured, it might not be such a rosy picture in the same period (July-August), single-family and multifamily permits dropped by 6.1 and 4.9 percent, respectively.
To be more accurate, multifamily permits have waned since the past five months. Single-family permits haven't even been good in the first place, so the drop was a drastic indicator. Permits have also begun to drop down, a sign of slowing momentum, according to a Wells Fargo Economics Group analysis, For Construction Pros pointed out.
According to actual construction activity, groundbreaking has increased somehow in the South, West, and the Midwest. Perhaps, the true indicator was the result in the Northeast sector, where the groundbreaking was considered flat. This seemed to ring true as the building permits fell to 1.229 million units.
The housing market seems to be reeling from all the events happening to the economy. Blame could also fall on lack of inventories as well as mortgage rates that have been rising steadily. Higher house prices, as well as first-time buyers with lesser purchasing power, are not helping matters.
