Housing starts rose less than expected in July, but climbed at the highest rate in nearly eight years, according to the Census Bureau.
Starts increased 0.2% at an annual rate of 1.21 million, the highest level since October 2007.
Building permits fell much more than expected: 16.3%, at an annual rate of 1.12 million.
Single family housing starts increased 12.8% month-over-month, while multi unit starts fell 17%.
Economists had estimated that housing starts increased 1% at an annualized pace of 1.186 million in July, and that permits fell 8% at an annualized pace of 1.23 million.
In a preview of the data to clients, Wells Fargo’s Sam Bullard wrote that building permits were likely to decline following the expiration of New York City tax incentives that increased the number in June.
Pantheon Macroeconomics’ Ian Shepherdson wrote after the release: “Starts were depressed by a sharp drop in the volatile multi-family component, but single-family starts rose by 12.8% to 782K, their highest level since December 2007. This won’t be sustained if new home sales don’t rise over the next few months, but the [National Association of Homebuilders] survey suggests this is a decent bet.”