Newly-released data on Tuesday revealed that housing starts surprisingly fell in July as the battered U.S. housing market continued to struggle to recover.
According to the Commerce Department, total housing starts fell 1% in July to a seasonally-adjusted annual pace of 581,000. The data was unexpected as economists predicted starts would rise 2.7% in July.
The July figures also represented a drop-off from previous months as housing starts climbed 6.5% in June and soared 15% in May.
“It’s still an improvement of where we were a few months ago. In this quarter, housing will finally contribute positively to GDP,” Peter Morici, an economist at the University of Maryland, told FOX Business.
Morici added, “I’m not concerned that it was a little bit lower than the optimistic forecasts. Overall, I think this is a pretty good number. I think we’re okay.”
The government also said single-family housing starts rose 1.7% last month, well off June’s torrid pace of 17.8%. Construction of multifamily homes tumbled 13% last month.
Building permits, which help gauge future activity, also fell, declining 1.8% in July to an annual rate of 560,000. Economists had expected permits to increase 0.5% to 573,000.
Shares of home builders like Centex (CTX) and Pulte Homes (PHM) were mixed in pre-market trading following the data.
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