U.S. housing starts rose to the highest level in eight months in July, indicating that the country’s housing market is on the right track to recover after stagnating in the April-June quarter.
New home groundbreakings surged 15.7 percent on annualized basis in July to a 1.09 million units, the strongest level since November, reported the Commerce Department on Tuesday. The growth in housing starts ended a two-month run of declines and exceeded analysts’ forecasts of an increase to 969,000 units.
The housing market is improving, with shortage of properties available for sale pushing up prices, which has made it difficult for first-time home buyers to acquire houses, reported Reuters.
Single-family housing starts, which track groundbreakings for the biggest segment of the market, rose 8.3 percent in July to the highest level in seven months. In the South, single-family home starts, where 50 percent of single-family home construction occurs, rose 16.9 percent in July after declining steeply in June.
Multi-family home starts rose 33 percent, the fastest pace since January 2006. This market is recording phenomenal growth as more prospective buyers opt to rent.
In a separate report, the Labor Department announced that its Consumer Price Index surged 0.1 percent in July after weaker energy prices partially compensated a rise in rental and food costs. The CPI had advanced 0.3 percent in June. In the year through July, the CPI appreciated 2.0 percent after jumping 2.1 percent in June.
The core CPI, which is adjusted for the volatile energy and food prices, rose 0.1 percent for the second consecutive month. The core CPI surged 1.9 percent in the year ended July. Rents, which compose a third of the CPI basket, grew 0.3 percent last month and 2.9 percent in the 12 months through July. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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