New housing starts in the United States fell more than expected in July, while building permits increasedHighlighting the continuing shortage of materials and workers that continues to dampen construction activity.
Housing starts fell 7% last month to a three-month low of 1.53 million units on an annual basis, according to government data released on Wednesday. However, building permits increased by 2.6% in July.
Based on the median forecast from a previous survey of economists, economists expect housing starts to fall slightly to 1.6 million units in July, while building permits are expected to rise.
Builders are trying to overcome raw material and labor constraints to build houses and reduce the backlog of orders. A pick-up in construction is likely to increase the number of homes on the market and help slow the rise in prices that have led to a fall in home sales.
Housing scarcity, high construction costs and strong demand for housing are all driving up prices. A record percentage of respondents said now is not a good time to buy a house because of high house prices, according to a consumer survey conducted by the University of Michigan in August.