Housing starts dropped 7 percent in July amid high home prices and material costs, failing to meet analysts’ expectations. (iStock)
Homebuilding fell short of expectations in July as builders coped with higher costs and material shortages.
Housing starts dropped 7 percent month-over-month to a seasonally adjusted annualized rate of 1.534 million, Fox Business reported, citing Commerce Department data. That’s below the 1.6 million housing starts anticipated by analysts.
While housing starts dipped, permits for future construction rose 2.6 percent from the previous month to a rate of 1.635 million, beating expectations of 1.61 million following an eight-month low in June.
Confidence among home builders is also on the decline. A survey from the National Association of Home Builders this week reveals confidence has dropped to its lowest mark since July of last year.
Builders have had to deal with an array of issues in recent months, from labor shortages to volatile material prices. Some companies have been forced to begin restricting sales on homes, unable to keep up with the demand from prospective buyers which has sent prices skyrocketing.
Lumber prices have been among the most confounding for builders. Prices are down on the essential material at the moment, but were at historic highs as recently as May. Now, lumber is piling up at mills as manufacturers deal with excess capacity.
[Fox Business] — Holden Walter-Warner
