US housing market remains under pressure in July; factory output rises
US single-family homebuilding fell sharply in July to the lowest in more than three-and-a-half-years and contract signings for purchases of existing homes also slid in the latest signal that the housi...
In July, the U.S. housing market experienced a significant downturn, with single-family homebuilding plummeting to its lowest level in over three and a half years. Contract signings for existing homes also declined, signaling ongoing pressure from higher mortgage rates and economic uncertainty stemming from the Iran war. The manufacturing sector, however, remained strong, with factory output hitting its highest level in over four years.
This growth was primarily driven by production gains in high-tech equipment, industrial and construction supplies. Single-family housing starts, a major component of homebuilding, dropped 9.9% in July to a seasonally adjusted annual rate of 808,000 units, marking the lowest since November 2022. Permits for future construction of single-family homes rose slightly, up 2.5% year-on-year, but remained near the slowest in three years.
Nationwide Senior Economist Ben Ayers noted that builders are likely to remain hesitant to invest in new projects until mortgage rates decrease. Total new home starts, including multifamily structures, fell 12.4% in July. Contract signings for existing homes also fell 2.3% in July, the lowest level since January. Despite these challenges, the manufacturing sector continued to thrive, with the Fed reporting a manufacturing output index rise of 0.2% in July, its highest level since April 2022.
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