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US new home construction slows in July
[WASHINGTON] Homebuilding in the United States slowed in July, in large part due to a drop in construction of apartment buildings, the government reported Wednesday.
The slowdown erased most of the gains recorded in a spike in June, and the pace of homebuilding has now decreased in four of the past five months, the Commerce Department said.
The decrease was likely to revive concerns among industry players and analysts that sluggish construction is failing to keep pace with demand amid a continuing economic recovery.
Total housing starts fell 4.8 per cent for the month to a seasonally adjusted annual rate of 1.155 million, the Commerce Department said. Analysts had instead been expecting a 0.3 per cent increase.
The July pace was 5.6 per cent below the rate recorded in the same month of last year.
Construction permits, an indicator of future homebuilding, also fell 4.1 per cent for the month.
The figures released Wednesday confirmed a sharp downward trend in construction of buildings with five or more units. They fell 17.1 per cent for the month to an annual rate of 287,000 units but were 35 per cent below the pace recorded in July of 2016.
Permits for multi-unit dwellings also fell 12.1 per cent.
The slowing apartment building could suggest homebuilders are turning away from serving what has been a tight rental market.
Still, construction of new single-family homes also slowed by 0.5 per cent.
Analysts say the recovering economy has produced a very tight market, with a surge of demand following the Great Recession met by slow construction of new homes while many current homeowners are reluctant to sell.