July Housing Starts Show Strength

Builders broke ground on new homes and apartments at a faster-than-expected pace in July, the government said in a report showing a robustness in the housing sector despite higher mortgage rates. Starts rose by 5.7% in July to a seasonally adjusted annual rate of 1.66 million units, beating Wall Street economists’ forecasts of a 1.61-million-unit rate. They recouped almost all of June’s 5.8% decline. Building permits issued in July, an indicator of future activity, fell a slight 0.5% after increasing since April, the Commerce Department figures showed. In the West, starts soared 22.7%, the biggest increase in the region since January 1997. A separate report found that new-construction financing in Southern California totaled $3.02 billion in the May-July period, up 15.4% from the same period last year, according to Acxiom/DataQuick. Building was up 23% in Los Angeles County, while Orange County experienced a 2.6% dip. Economists have been hoping that with mortgage rates now above 8%, the housing market would slow under its own steam, helping cool the overall economy.