US August Housing Starts Surge to Highest Level Since April, Builders Weigh Inventory Against Demand Outlook

The annualized monthly rate of new home construction in the United States in August was 9.6%, higher than the expected 5.8% and the previous -6.8%. The total number of new home constructions was 1.356 million, reaching a new high since April. Builders are weighing inventory against demand prospects, with a nearly 16% increase in new single-family home projects. Mortgage rates have dropped to the lowest since 2022, supporting home sales. Despite expectations that residential construction will contribute to economic growth, third-quarter GDP is expected to decline by 0.3 percentage points. Investors favor stocks of builders, with the iShares US Home Construction ETF rising by about 20%