Wednesday, September 19 14:44:00
U.S. housing starts rose less than expected in August as groundbreaking on multifamily home projects fell, but the trend continued to point to a turnaround in the housing market.
The Commerce Department said today housing starts increased 2.3 percent to a seasonally adjusted annual rate of 750,000 units. July's starts were revised to show a 733,000-unit pace instead of the previously reported 746,000.
Economists polled by Reuters had forecast residential construction rising to a 765,000-unit rate. Compared to August last year, residential construction was up 29.1 percent.
"Another step forward on a very long staircase," said John Tashjian, Principal, Centurion Real Estate Partners in New York.
"We continue to see positive signs emerging from the housing market, suggesting that the entire market, not just individual submarkets, are stabilising and steadying themselves for future growth." U.S. Treasury debt prices rose slightly after the report. U.S. stock index futures held their gains, while the dollar was little changed.
Housing starts are now a third of their 2.27 million-unit peak in January 2006. The housing market, the Achilles heel of the recovery from the 2007-09 recession, is slowly healing.
Sales have been creeping up and the house price decline has bottomed, with a tightening supply of properties on the market raising prices in some metropolitan areas. In addition, homebuilder sentiment touched a six-year high in September.
Home building is expected to add to gross domestic product growth this year for the first time since 2005.
Though residential construction accounts for only about 2.5 percent of GDP, economists estimate that for every new house built, at least three new jobs are created. (C ) Reuters