US homebuilding is expected to fell down in July as construction is multi family and single family homes get declined, this could temper expectations of rebound in the housing market activity in third quarter.
Commerce Department said that decline in housing starts at 4.8% to seasonally adjusted rate of around 1.16 million units. Pace of sales in June was revised to 1.21 million units from previous 1.22 million units.
Reports showed that decline in building suggests that construction of residents could struggle to regain the momentum after contracting in second quarter at steepest pace since third quarter of 2010.
Economists polled that forecast is breaking activity to a small change at rate of 1.22 million units in July. Percentage of homebuilding fell down at 5.6 percent on a year basis.
Single family homes account for largest share of housing market which slipped at 0.5% to rate of 856,000 units last month.
Despite of the strong demand for housing, groundbreaking on projects of single family housing slowed down since racing near to 9-1/2-year in February. Homebuilders still continue to complain that they are unable to find framers, skilled labor and buildable lots remain in short supply.
Builders also say that cost of building material is rising very fast. Prices of building materials were even increasing before U.S. government slapped some anti subsidy duties of Canadian softwood lumber in month of April.
A survey was done Tuesday which showed increase of confidence among homebuilders in August and amid the rising demand of new houses. Suring last month, volatile of multi family housing segment tumbled at 15.3% to rate of 299,000 units.
Building of Multi Family home is slowing down as apartments come on market which leads to an increase in rental vacancy rate during this year. Permits for building during last month fell down by 4.1% to rate of 1.22 million units. Permission of single family homes were unchanged, where permission for construction of multi family homes plunged at 11.2 percent in July.