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US housing market stabilizing
By Lucia Mutikani |
September 22, 2010, Wednesday
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Print Edition
Print Edition
RESIDENTIAL construction in the United States rose more than expected in August to a four-month high, suggesting the embattled housing market was starting to stabilize following the end of a homebuyer tax credit.
The Commerce Department said yesterday that housing starts rose 10.5 percent, the largest increase since November, to a seasonally adjusted annual rate of 598,000 units. July's residential construction was revised down to show a 0.4 percent gain, which was previously reported as a 1.7 percent increase.
Analysts polled by Reuters had expected housing starts to rise to a 550,000-unit rate. Compared to August last year, housing starts were up 2.2 percent.
The data came as Federal Reserve policy makers were due to meet to assess the economy. The US central bank is largely expected to reaffirm its bias toward further monetary policy easing to help the recovery.
However, the Fed is not expected to announce a fresh round of purchases of longer-term government debt to keep interest rates low as economic data such as retail sales for August have eased fears of a double-dip recession.
US stock index futures extended gains on the housing data, while Treasury debt prices trimmed gains.
New building permits for future home construction rebounded 1.8 percent to a 569,000-unit pace last month, lifted by a 9.8 percent rise in permits for multi-family units, after an unrevised 4.1 percent drop in July. Analysts had expected a 560,000-unit pace in August.
The housing market hit a soft patch following the end of a popular homebuyer tax credit in April and a survey showed sentiment among builders remained mired at an 18-month low in September.
The Commerce Department said yesterday that housing starts rose 10.5 percent, the largest increase since November, to a seasonally adjusted annual rate of 598,000 units. July's residential construction was revised down to show a 0.4 percent gain, which was previously reported as a 1.7 percent increase.
Analysts polled by Reuters had expected housing starts to rise to a 550,000-unit rate. Compared to August last year, housing starts were up 2.2 percent.
The data came as Federal Reserve policy makers were due to meet to assess the economy. The US central bank is largely expected to reaffirm its bias toward further monetary policy easing to help the recovery.
However, the Fed is not expected to announce a fresh round of purchases of longer-term government debt to keep interest rates low as economic data such as retail sales for August have eased fears of a double-dip recession.
US stock index futures extended gains on the housing data, while Treasury debt prices trimmed gains.
New building permits for future home construction rebounded 1.8 percent to a 569,000-unit pace last month, lifted by a 9.8 percent rise in permits for multi-family units, after an unrevised 4.1 percent drop in July. Analysts had expected a 560,000-unit pace in August.
The housing market hit a soft patch following the end of a popular homebuyer tax credit in April and a survey showed sentiment among builders remained mired at an 18-month low in September.
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