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By Shobhana Chandra
WASHINGTON - New-home construction in the U.S. fell in July, while the number of building permits jumped to the highest level in four years, indicating the industry will keep improving in the second half of the year.
Starts fell 1.1 percent to a 746,000 annual rate from June’s 754,000 pace, Commerce Department figures showed today in Washington. The median estimate of 79 economists surveyed by Bloomberg News called for 756,000. Building permits, a proxy for future construction, rose to an 812,000 pace, the most since August 2008.
Less costly properties combined with record-low mortgage rates are reviving demand, helping builders like PulteGroup Inc. boost profits. A drop in foreclosures, increased hiring and easier access to credit may be required to foster a more pronounced and sustained rebound in the industry that triggered the recession.
“Housing is turning out to be one of the better parts of the economy at this time,” Richard Moody, chief economist at Regions Financial Corp. in Birmingham, Alabama, said before the report. “It is actually supportive of growth rather than being a drag like it was before.”
Starts estimates in the Bloomberg survey ranged from 730,000 to 800,000. The prior month was revised down from a previously reported 760,000 pace.
The number of Americans filing applications for unemployment benefits was little changed last week, bringing the average over the past month to the lowest level since late March, a sign the labor market has stabilized after employment picked up in July, a report from the Labor Department also showed today.
Jobless claims climbed by 2,000 to 366,000 in the week ended Aug. 11, in line with the median forecast of 45 economists surveyed by Bloomberg, which called for an increase to 365,000. The four-week moving average, a less volatile measure, dropped to 363,750, the fewest since the week ended March 31.
Stock-index futures extended earlier gains after the reports. The contract on the Standard & Poor’s 500 Index maturing in September rose 0.3 percent to 1,407.1 at 8:32 a.m. in New York.
Construction of single-family houses fell 6.5 percent to a 502,000 rate, the first decline since February.
Work on multifamily homes, such as townhouses and apartment buildings, rose 12 percent to an annual rate of 244,000, a five- month high.