Singlefamily housing starts jump 15.8 in August
Permits for future singlefamily building rise 2.8

WASHINGTON, Sept 18 Reuters U.S. singlefamily homebuilding rebounded sharply in August, but a moderate increase in building permits suggested that the momentum was unlikely to be sustained against the backdrop of rising supply of new homes on the market.

The jump in singlefamily housing starts reported by the U.S. Commerce Department on Wednesday probably reflected the fading drag from Hurricane Beryl, which had depressed homebuilding in the South. Homebuilders could also face a challenge from increasing inventory of previously owned homes for sale, with the U.S. Federal Reserve expected to cut interest rates on Wednesday for the first time since 2020.

Most home owners have mortgage rates below 4, and higher rates had deterred many from listing their houses. The socalled rate lock starved the housing market of supply, creating an opportunity for builders.

A renewed dip in singlefamily construction activity is likely over the next few months as homebuilders seem to have responded too aggressively to the slight upturn in new home sales in 2023, and are now left with an excessive level of inventory, said Oliver Allen, senior U.S. economist at Pantheon Macroeconomics. Lower mortgage rates will help boost demand for new homes at the margin.

Singlefamily housing starts, which account for the bulk of homebuilding, surged 15.8 to a seasonally adjusted annual rate of 992,000…