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Friday 21st of August 2009
August 18, 2009

US housing starts post surprise fall in July


by Kay Murchie
US housing starts post surprise fall in July

The Commerce Department has revealed a fall in US housing starts for the month of July ending three months of gains.

According to the Commerce Department, construction of new US homes fell 1% in the month to an annual rate of 581,000 properties.

However, there was a fifth straight monthly rise in single family home starts, increasing 1.7% compared with the previous month to an annual rate of 490,000 units - the highest level since October.

Meanwhile, applications for building permits, a barometer of future home construction, fell 1.8% to an annual rate of 560,000 units and were down 39.4% from a year earlier.

Despite hopes of a turnaround within the US economy, the housing market is still a long way from pre-recession levels. Housing starts in June were still almost 38% below levels seen in July 2008.

The housing market is key to a recovery and is one of the primary reasons the US is in the midst of its worst economic downturn in 70 years.

However, on a positive note, The National Association of Home Builders said yesterday its index of industry confidence grew in August to the highest level in over a year.

In other news for the world’s largest economy, it has been revealed that US wholesale prices recorded an unexpected fall last month, with prices falling 0.9% compared with the previous month.

Meanwhile, core wholesale prices (which strip out the volatile cost of energy and food) were down 0.1% during the month compared with June.

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