On Friday, the 16th of August 2019, data released by US Commerce Department by GMT 12.30, early US trading hours, had darkened outlook further for US housebuilding despite a sharp fall in mortgage rates, as US home building had posted a plunge for three straight months in a row in July, however, a climb in building permits slightly had brightened outlook for a scuffling US housing market.
According to US Commerce Department’s Friday’s (August 16th) data, housing starts figure fell by 4.0 percent to a seasonally adjusted 1.191 million units in July, while an analysts’ poll was expecting a sharp rebound in US housing starts to 1.257 billion units in July amid a much-lower mortgage rate.
According to data from Mortgage finance agency, Freddie Mac, 30-yr fixed mortgage rate had dropped to 3.60 percent last month after surging as much as 4,94 percent later last year. Meanwhile, adding that a decline in mortgage rates had almost little or no impacts to a dwindling US housing market, as shortage of lands and labors were restraining potential home builder’s ability, a Chief Economist at MUFG in the New York, Chris Rupkey said, “After almost a year, lower mortgage rates have done nothing to boost residential housing construction.
Housing construction remains the weak link for new investment in the economy and will keep GDP growth slower than it would have been”. Nonetheless, housing and factory orders had been the weakest spots for the US economy since Trump had ratcheted up trade tension with China on last May by imposing 25 per cent tariff hike on $200 billion worth of Chinese imports, a stringent move which forced analysts to raise a question on whether the largest economy in the world had been downing underneath a steep recession.