New-home construction unexpectedly declined last month, despite continued improvement in the market for single-family homes, according to government data released Tuesday.
Housing starts fell by 1 percent from June’s level, to an annualized rate of 581,000. compared with June Construction was down 37.7 percent from a year earlier, according to the Commerce Department data. Analysts had expected construction starts to increase.
But those figures were dragged down by a 16.7 percent month-to-month drop in construction of multi-unit homes like apartment buildings, traditionally a volatile market. This market continues to be hobbled by the difficultly in securing financing and competition from homeowners unable to sell their properties who then decide to rent their homes, said David Crowe, an economist for the National Association of Home Builders.
Meanwhile, construction of single-family homes rose 1.7 percent compared with June, to an annual pace of 490,000 units. That is the fifth consecutive monthly increase in the single-family market. In another hopeful sign for that market, while construction permits were down overall, they rose 5.8 percent for single-family homes.
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