U.S. housing starts rise below expectations in July

Housing starts in the U.S. disappointed in July. On a sequential basis, housing starts rose modestly by 0.9 percent to 1.168 million. This is well below the consensus expectations. Meanwhile, June’s data was downwardly revised by 15k. Together, this implies slower growth in housing activity that anticipated. July’s weak data was mainly driven by single-and multi-family starts.

The single-family starts rose 0.9 percent to 306k. Starts had dropped sharply in June, for both single-family and multi-family units and the series was expected to recover more strongly in July given their volatile nature.

Nevertheless, the rise was disappointing, leaving start activity lowing subdued over the summer months so far. Region wise, starts came in mixed. It fell in the Northwest and West, but rose in the Midwest and South. After the July report, the annual trend in starts appears weak, with total starts down 1.4 percent year-on-year as a result of a sharp 11.6 percent year-on-year decline in multi-family starts.

The report released today came in softer than expected and indicates towards slower momentum in construction spending compared to what was factored, noted Barclays in a research report.

“As a result, our residential investment tracking estimate declined five-tenths to 0 percent, and our overall Q3 GDP tracker was lowered by one-tenth, to 3.0 percent”, added Barclays.

At 17:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was slightly bullish at 69.5419. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex