Dive Brief:
- Housing starts rose 2.1% in July to a 1.211 million annualized rate, up from the revised 1.186 million rate in June, the Commerce Department reported Tuesday. July housing starts were 5.6% above the July 2015 mark.
- New applications for building permits, which predict future construction activity, slipped 0.1% in July but were 0.9% above July 2015 levels.
- Multifamily construction increased 8.3% last month, while single-family construction inched up 0.5%.
Dive Insight:
July housing starts far surpassed expectations, as economists surveyed by MarketWatch predicted starts would slightly dip to a 1.18 million rate. July's housing starts figure represents the strongest month since February.
The housing starts report comes one day after the National Association of Home Builders/Wells Fargo Housing Market Index found that builder confidence rose two points in August to a score of 60. NAHB Chairman Ed Brady pointed to increased construction and new homes sales activity as the drivers of this month's strong optimism level among homebuilders.
The two positive reports this week echo expert predictions of a slow but steady housing recovery, as the market continues to claw its way back to normal levels after the devastating crash and recession. Despite concerns of regulatory costs, lack of available land, and a tight labor pool, builders seem to be slowly coming around to the idea of ramping up new construction to meet booming demand.
Today's report will be followed by new home sales Aug. 23, existing home sales Aug. 24 and pending home sales Aug. 31.
