August US housing starts report surprise slide after months of gains

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August US housing starts report surprise slide after months of gains
August US housing starts report surprise slide after months of gains (Provided by Financial World)

On Thursday, US Commerce Department data had revealed that the US homebuilding slid by a surprising 5.1 per cent following three months of consecutive gains including a record 17.9 per cent rise in July, remarking an unprecedented sluggishness thought to have bolted out of the blue in one of the few brighter spots in a recessed US economy.

Besides, according to the US Commerce Department’s homebuilding data released earlier on the day, new home constructions had been at a seasonally adjusted pace of 1.42 million last month on an annualized basis which followed a record surge of 17.9 per cent a month earlier.

Drop-offs in US homebuilding was greater-than-anticipated in August

In point of fact, as a drop off in US homebuilding had accelerated sharply in August followed by an expiration of pandemic stimulus aid, US home construction remained 51.6 per cent higher than an April low, while industry analysts were quoted saying that the US housing market would highly likely to remain as a shimmering ray of hope in a US economy which had been vying to vent out a concrete way towards fiscal recovery.

Aside from that, US Commerce Department data had also unveiled on Thursday that the applications for building permits, a critical indicator to future housing market activities, fell by 0.9 per cent in August to a seasonally adjusted 1.47 million units, however the declines followed three straight months of solid gains as beforementioned.

Meanwhile, referring to US Fed’s pledge to a near-zero interest rate at least until end-2023 which would likely to lead to a further tottering in the average rates of the US mortgage buyer Freddie Mac, a leading US economist at Oxford Economics, Nancy Vanden Houten said followed by the release of a whacked out US housing market data, “Strong demand and a soaring level of home builder confidence will continue to support housing starts in the second half of 2020, though lingering coronavirus uncertainty and the economy’s slower pace of recovery may limit the upside.

Commerce Department