US Building More Homes

US Building More Homes

Residential News » North America Residential News Edition | By Francys Vallecillo | August 16, 2013 12:04 PM ET

Housing starts in the U.S. increased 20.9 percent from July 2012 levels while building permits for private homes were 12.4 percent above last year, according to the latest data from the U.S. Department of Housing and Urban Development. 

The number of housing starts is now at a seasonally adjusted annual rate of 896,000 compared to 846,000 the previous month, showing a 5.9 percent monthly increase. The monthly start pace fell short of the 900,000-unit pace predicted by economists polled by Reuters. 

The number of permits to build homes is now at a seasonally adjusted annual rate of 943,000, 2.7 percent higher than June's 918,000 number. The monthly increase also fell short of predictions. 

The minimal monthly increase could be a result of the recent fluctuation in mortgage rates. 

"It's not a surprise given the recent rise in mortgage rates," Michael Hanson, senior economist with Bank of America Merrill Lynch in New York, told Reuters. "I think we are looking at a situation that some air is coming out of the housing recovery given the higher mortgage rates."

However, the higher yearly increases in starts and permits are a better barometer of housing market conditions, experts say. 

Home builders in the U.S. are still confident in the housing market, recently showing an increase in the National Association of Home Builder's index.

"Builders are seeing more motivated buyers...than they have in quite some time," NAHB chairman Rick Judson said.

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