New Construction “Steady As She Goes”; Building Permits Increase

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New construction can't break its range.

Housing Starts Flat In July; Margin Of Error High

Single-Family Housing Starts fell to a seasonally-adjusted, annualized 425,000 units in July, according to the Census Bureau.

A "Housing Start" is defined as a home on which construction has started and ground has broken.

In addition, Single-Family Housing Starts were revised lower for both May and June of this year, by 6,000 units and 2,000 units, respectively. 

Like with most months, though, the government's official report states that the Housing Starts numbers have a margin of error exceeding their actual measurement. Mathematically, this renders the data statistically irrelevant.

• July Published Results : +4.9%
• July Margin of Error : ±8.9%

July Housing Starts made have increased by as much as 13.8%, or they may have dropped up to 4.0%, in other words. The data is somewhat useless to us.

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Building Permits Rising

Also included in the Housing Starts report is the Building Permits tally. 

As compared to June, permits were higher by a half-percent nationwide, with varying results by region.

• Northeast : +2.9 percent from June
• Midwest : +0.0 percent from June
• South : -1.4 percent from June
• West : +4.9 percent from June

When permits are issued, 86 percent of them start construction within 60 days. This means that new home sales and housing stock should follow the Building Permits trend, but on a 2-month delay. Expect improvement into the fall season.

Buying New Construction? Get Low Mortgage Rates.

If you're buying new construction or talking with a builder, know your lending options ahead of time. Most builders have in-house lenders you can talk to. You may also want an outside opinion.

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