U.S. housing starts edged down 0.1 percent in July but exceeded Wall Street forecasts as groundbreaking for single-family homes marched higher, a Commerce Department report showed on Tuesday.
July housing starts came in at a 2.042 million unit annual rate, down from June, which saw starts revised up to a 2.045 million unit pace from an originally reported 2.004 million unit rate.
Wall Street economists had expected housing starts to increase to a 2.025 million unit pace in July.
Single-family housing starts rose 0.5 percent to a 1.711 million unit pace, helping to partially offset a 3.2 percent decline in multi-family housing starts, which held a 331,000 unit pace, the report said.
Permits for future groundbreaking, an indicator of builder confidence, also exceeded economists’ expectations, rising 1.6 percent to a 2.167 million unit pace -- a high not seen in more than 32 years. Economists had forecast permits to decline to a 2.105 million unit pace in July from a revised 2.132 million unit pace in June.
Low mortgage rates have supported the housing sector for more than four years. Even though the Federal Reserve has raised its target for short-term interest rates, long-term rates have remained low. Over the past month, however, average 30-year fixed-rate mortgages have begun to inch back to levels held a year ago, according to finance company Freddie Mac.
While economists had predicted some slowing in the housing sector in 2005, housing starts and sales have remained robust and shown little sign of sustained easing.
For July, housing starts rose 9.1 percent in the U.S. Midwest, 6.5 percent in the Northeast and 2.1 percent in the West. Groundbreaking fell 5.4 percent in the South, the Commerce Department said.