This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

July Housing Starts Fall 1.5%

WASHINGTON (TheStreet) -- Homebuilders began construction on 1.5% fewer homes in July while applications for building permits fell 3.2%.

The Commerce Department said early Tuesday that housing starts came in at a seasonally adjusted annual rate of 604,000 in July. The figure compares with a revised June rate of 613,000 housing starts and came in slightly worse than the rate of 608,000 economists had expected, according to consensus estimates listed on Briefing.com. The housing starts rate in June was originally reported at a pace of 629,000.


Applications for building permits fell 3.2% to a seasonally adjusted annual rate of 597,000, lower than the revised June rate of 617,000, and lower than the expected rate of 606,000. June's building permits rate was originally reported at 624,000. Building permits are viewed as an indication of future home construction.

On Monday, data showed that homebuilder sentiment held steady at a low reading of 15 in August as the usual suspects of an oversupply of homes, inaccurate appraisal values and tight lending kept home purchasers at bay.


"Builders continue to confront the same major challenges they have seen over the past year, including competition from the large inventory of distressed homes on the market, inaccurate appraisal values, and issues with their buyers not being able to sell an existing home or qualify for favorable mortgage rates because of overly tight underwriting requirements," said Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a homebuilder from Reno, Nev.

The NAHB Housing Market Index measure builder perceptions of current single-family home sales and sales expectations for the next six months. Any reading below 50 indicates poor sentiment. The index has not been above 50 since April 2006.

The housing and homebuilding sector is well off its 2010 spring peak, ahead of expiring tax credits, and is only slightly higher than at the beginning of 2010. Whereas other sectors have begun an economic rebound in earnest, the housing sector continues to lag as a bloated supply of homes for sale -- both newly built and previously owned -- coupled with depressed pricing from foreclosures pressure the market.

The SPDR S&P Homebuilders (XHB), an exchange-traded fund that tracks the homebuilder sector, remains around 60% off its peak of $46.08 in early 2006. The iShares Dow Jones U.S. Home Construction (ITB) ETF remains more than 70% off its peak of $50.10 in the spring of 2006.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,088.14 -25.40 -0.15%
S&P 500 1,988.03 +4.50 0.23%
NASDAQ 4,474.3070 +18.2910 0.41%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs