Singlefamily housing starts increase 6.7 in July
Singlefamily building permits rise 0.6
Overall housing starts climb 3.9; permits gain 0.1
Manufacturing production increases 0.5

WASHINGTON, Aug 16 Reuters U.S. singlefamily homebuilding surged in July and permits for future construction rose amid an acute shortage of previously owned houses, but mortgage rates climbing back to near twodecade highs could slow the housing market improvement.

The sharp rebound in groundbreaking on singlefamily housing units reported by the Commerce Department on Wednesday was another sign of the economy continuing to defy dire forecasts of a recession. It followed news on Tuesday that retail sales rose strongly in July, which prompted economists to upgrade their growth estimates for the third quarters.

With inflation retreating, economists did not see the flow of upbeat data leading to another interest rate hike next month.

Housing generally has shown resilience, but Fed officials may overlook this latest news of strengthening demand in the economy when it comes to judging whether to hike rates again this year because of the progress made on the inflation front, said Christopher Rupkey, chief economist at FWDBONDS in New York.

Singlefamily housing starts, which account for the bulk of homebuilding, jumped 6.7 to a seasonally adjusted annual rate of 983,000 units last month. They rose 9.5 yearonyear in July. The increase in groundbreaking was led by the West, where singlefamily…