Unemployment, Foreclosures, Falling Home Prices Lead to 5% Dip in August Housing Starts
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Data Tuesday showed a dip in housing starts for the month of August, but a solid rise in a reading on the forward looking building permits metric.
The U.S. Department of Commerce said production of homes just beginning fell 5 percent to an annual pace of 571,000 in August, below the Street consensus calling for 590,000. Factors keeping housing starts low included elevated unemployment, foreclosures, and declining home prices. Further, tighter lending standards and lower home equity mean fewer buyers are able to take advantage of record-low mortgage interest rates.
Two of four regions in the survey showed a drop in starts. The Northeast dipped 29.1 percent in the wake of hurricane Irene.
The report also showed the number of homes currently under construction in August hit a record low annual rate of 408,000. Construction fell to all time lows in three of four regions.
Building permits in August came in at a seasonally-adjusted annual rate of 620,000, up 3.2 percent from July, and 7.8 percent from the same period last year.
While the July readings for building permits were revised higher from an initial 597,000 to 601,000, the prior month readings for housing starts was revised lower from 604,000 to 601,000.
The SPDR S&P Homebuilders ETF (NYSE: XHB) is up 0.48 percent Tuesday morning.
The U.S. Department of Commerce said production of homes just beginning fell 5 percent to an annual pace of 571,000 in August, below the Street consensus calling for 590,000. Factors keeping housing starts low included elevated unemployment, foreclosures, and declining home prices. Further, tighter lending standards and lower home equity mean fewer buyers are able to take advantage of record-low mortgage interest rates.
Two of four regions in the survey showed a drop in starts. The Northeast dipped 29.1 percent in the wake of hurricane Irene.
The report also showed the number of homes currently under construction in August hit a record low annual rate of 408,000. Construction fell to all time lows in three of four regions.
Building permits in August came in at a seasonally-adjusted annual rate of 620,000, up 3.2 percent from July, and 7.8 percent from the same period last year.
While the July readings for building permits were revised higher from an initial 597,000 to 601,000, the prior month readings for housing starts was revised lower from 604,000 to 601,000.
The SPDR S&P Homebuilders ETF (NYSE: XHB) is up 0.48 percent Tuesday morning.
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