U.S. housing starts fell last month, driven by a pullback in multifamily construction.
Housing starts decreased 4.8% in July from the prior month to a seasonally adjusted annual rate of 1.155 million, the Commerce Department said Wednesday. Residential building permits, which can signal how much construction is in the pipeline, fell 4.1% to an annual pace of 1.223 million last month.
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Economists surveyed by The Wall Street Journal had expected a 0.4% increase for starts, while predicting that permits remained flat.
Starts ticked down 0.5% in July for single-family construction and plummeted 15.3% for multifamily construction. Permits last month were flat for single-family homes and down 11.2% for buildings with multiple units.
Housing-starts data are volatile from month to month and can be subject to large revisions.
Housing starts in June were revised down to a 1.213 million annual pace from an initial estimate of 1.215 million. Permits, which tend to be more reliable, were revised up to a 1.275 million rate from 1.254 million.
Looking beyond monthly volatility, starts in the first seven months of the year were up 2.4% from the same period in 2016. Permits during this period increased 6.5% from a year earlier.
New housing construction has eased since touching a post-recession high in October 2016. Building remains well below the peak touched in 2005 and 2006, when the housing bubble was building.
Softer home construction was a drag on economic growth this spring. A separate Commerce Department report last month showed spending on home building and improvements dropped at a 6.8% annualized pace during the second quarter, the sharpest decline since 2010. That was a significant factor keeping broader output growth at a moderate 2.6% rate.
The Commerce report can be found at http://www.census.gov/construction/nrc/pdf/newresconst.pdf
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(END) Dow Jones Newswires
August 16, 2017 08:45 ET (12:45 GMT)