US hous­ing starts slip, per­mits main­tain gains

Pakistan Observer - - ECONOMY WATCH -

WASH­ING­TON—US hous­ing starts slipped in May as the con­struc­tion of multi-fam­ily hous­ing units dropped, but fur­ther gains in build­ing per­mits sug­gested a re­bound that would con­tinue to sup­port eco­nomic growth in the sec­ond quar­ter. Ground­break­ing fell 0.3 per­cent to a sea­son­ally ad­justed an­nual pace of 1.16 mil­lion units, the Com­merce Depart­ment said on Fri­day. May’s de­cline fol­lowed a 4.9 per­cent surge in April.

Hous­ing re­mains a pil­lar of strength for the econ­omy, with res­i­den­tial con­struc­tion adding al­most six-tenths of a per­cent­age point to first-quar­ter gross do­mes­tic prod­uct, the big­gest con­tri­bu­tion in more than three years. Economists polled by Reuters had fore­cast hous­ing starts fall­ing to a 1.15 mil­lion-unit pace last month. U.S. Trea­sury prices pared losses af­ter the data. Stock in­dex fu­tures were trad­ing lower and the dol­lar .DXY was weaker against a bas­ket of cur­ren­cies.

Ground­break­ing on sin­gle-fam­ily homes, the largest seg­ment of the mar­ket, rose 0.3 per­cent to a 764,000-unit pace last month. Sin­gle-fam­ily starts in the South, where most home build­ing takes place, rose 2.6 per­cent to their high­est level since De­cem­ber 2007. Sin­gle-fam­ily starts in the North­east surged 12.7 per­cent. In the West, ground­break­ing on sin­gle-fam­ily hous­ing projects rose 1.9 per­cent. But sin­gle-fam­ily starts in the Mid­west tum­bled 14.7 per­cent to a six-month low.

Fur­ther gains in sin­gle-fam­ily starts are likely af­ter a sur­vey on Thurs­day showed con­fi­dence among home builders rose to a five-month high in June amid op­ti­mism over sales and buyer traf­fic. But sin­gle-fam­ily home con­struc­tion con­tin­ues to run ahead of per­mits, which could limit gains in the near term. Hous­ing starts for the volatile multi-fam­ily seg­ment fell 1.2 per­cent to a 400,000-unit pace. The drop fol­lowed an 11.9 per­cent jump in April.

The multi-fam­ily seg­ment of the mar­ket con­tin­ues to be sup­ported by strong de­mand for rental ac­com­mo­da­tion as some Amer­i­cans re­main wary of own­ing homes years af­ter the hous­ing mar­ket col­lapse. Multi-fam­ily home con­struc­tion is also be­ing aided by ris­ing house­hold for­ma­tion as a fairly strong la­bor mar­ket in­creases em­ploy­ment op­por­tu­ni­ties for young adults.

Build­ing per­mits rose 0.7 per­cent to a 1.14 mil­lion-unit rate last month. Per­mits for the con­struc­tion of sin­gle-fam­ily homes fell 2.0 per­cent last month to a 726,000-unit rate. But sin­gle-fam­ily per­mits in the South rose 0.8 per­cent to a five-month high. Multi-fam­ily build­ing per­mits in­creased 5.9 per­cent to a 412,000-unit pace in May.—Agen­cies

KARACHI: Bank Al­falah with its aim to strengthen in­no­va­tion of every­day trans­ac­tions, en­tered in part­ner­ship with Cinepax Cine­mas and UnionPay to launch the ‘Cine­pay Mo­bile Wal­let’. This pic­ture shows Atif Ba­jwa, Pres­i­dent & CEO, Bank Al­falah (fifth from left) and Hashim Raza, CEO Cinepax Cine­mas (sev­enth from left) along with their teams at the sign­ing cer­e­mony.

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