Housing Market Information

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Housing starts saw a significant drop, while first-time unemployment claims plummeted to a 14-year low, and consumer prices dropped to their lowest point in more than a year. Housing Starts After seeing a solid performance in July, new home construction news for August was not exactly stellar, with permits and housing starts both seeing drops, according to last week’s report from the Census Bureau and the Department of Housing and Urban Development. Building permits issue in August for construction of residences of all types, fell to an annual rate of 998,000, marking a 5.6 percent drop from July’s revised rate of 1,057,000. Permits for single-family homes took a smaller hit, dropping only 0.8 percent to 626,000 in August from July’s 631,000. Overall, permits are still 5.3 percent higher than August 2013. Starts on construction of private housing took a steep fall in August to an annual average of 956,000, marking a sizable 14.4 percent drop from July’s revised estimate of 1,117,000. Starts on single-family homes saw a much smaller drop, falling 2.4 percent to 643,000. Overall, constructions starts were still 8 percent higher than August 2013. Meanwhile, completions of private housing in August hit an annual average of 892,000, which was 3.2 percent over July’s revised estimate of 864,000 and was 16.9 percent higher than August 2013’s average of 763,000. But permits and starts are the key figures to watch as they indicate future real estate activity. Bearing that in mind, the wild swings between July’s gains and August’s losses should be taken with a grain of salt given that much of the fluctuation has been occurring in construction of multi-family dwellings, such as apartments, and because single-month performances aren’t indicative of trends. “Overall, the weakness in this report reflects the expected giveback from the unexpected surge in activity the month before, and is not an indication of weakening underlying momentum in the sector,” Millan Mulraine, deputy head of U.S. research and strategy at TD Securities, noted in a public statement.