WASHINGTON - U.S. homebuilding fell for a third straight month in July amid a steep decline in the construction of multi-family housing units, but a jump in permits to a seven-month high offered hope for the struggling housing market.
Housing starts dropped 4.0% to a seasonally adjusted annual rate of 1.191 million units last month, the Commerce Department said on Friday. Data for June was revised down to show starts falling to a pace of 1.241 million units, instead of dropping to a rate of 1.253 million units as previously reported.
Financial markets expect the U.S. central bank will lower its short-term interest rate by another 25 basis points because of the ongoing trade impasse, which this week contributed to an inversion of the U.S. Treasury yield curve and unleashed a sharp sell-off on global stock markets. Against the backdrop of growing recession risks, consumer sentiment data will be closely watched in the coming months. Consumer spending is the economy’s main pillar. Retail sales surged in July.
Building permits surged 8.4%, the largest gain since June 2017, to a rate of 1.336 million units in July. Last month’s surge is a positive development for permits, which have been weak this year. Much of the decline in permits has been concentrated in the single-family housing segment.