Housing starts unexpectedly fall in July
Housing starts fell 7% – supply shortages and higher costs cited
Macro Trends Advisors founding partner Mitch Roschelle on construction shortages in the suburbs and families moving out of cities due to the delta variant impacting schools.
U.S. homebuilding slowed last month as builders grappled with higher material costs and home prices.
Housing starts fell 7% in July to a seasonally adjusted annualized rate of 1.534 million, the Commerce Department said Wednesday. Analysts surveyed by Refinitiv were expecting 1.6 million starts. The June reading was revised up to 1.65 million from 1.643 million.
Permits for future construction rose 2.6% to a rate of 1.635 million after June’s reading was the lowest since October. Analysts had anticipated a reading of 1.61 million.
Builders have since the reopening of the economy struggled with supply chain disruptions that have resulted in materials shortages and higher costs.
The cost of strand board, a common material used in homebuilding, for example, had soared by more than 500% this year before retreating.
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Builders have had difficulty securing lumber at lower prices and the higher cost has added $36,000 to the price of building a new home, pricing some buyers out of the market.
A survey released Tuesday by the National Association of Home Builders showed confidence this month fell five points to 75, the lowest reading since July 2020.