US new home construction rises, buoyed by apartment boom

Workers and wooden beams Single-family homes have an outsize economic impact - for every single-family home built, at least three jobs lasting for a year are created

The rate of new US home-building rose in July, spurred on by a rise in the construction of new apartments.

The Commerce Department said new-home construction climbed by 5.9% from the prior month.

The annual rate was 896,000 new homes, below a recent peak of just over 1 million in March.

The rate of new single-family houses being built dropped by 2.2% - a sign that builders could be worried about rising mortgage rates.

Permits to build new homes rose 2.7% but missed analysts' expectations.

The rate for a 30-year mortgage was 4.4% in July - a full percentage point higher than it had been in May, before the US Federal Reserve started hinting that it might begin to slow down its extraordinary efforts to prop up the US economy.

A spate of mixed economic data since then - including news that the US economy grew by 1.7% in the second quarter - has tempered fears of an end to stimulus.

Productivity rises

In a separate report, US workers continue to grow more productive although the rate of productivity growth has slowed since 2009.

Productivity grew by 0.9% in the second quarter from the same period last year. Labour costs rose by 1.4%, reversing a drop of 4.2% in the prior quarter.

If productivity slows significantly, US companies might be forced to bring on more workers to make up for the slack.

Productivity growth has averaged 2% a year since 1947, although it has slowed in recent years.

More on This Story

US Economy

Related Stories

The BBC is not responsible for the content of external Internet sites

More Business stories



Try our new site and tell us what you think. Learn more
Take me there

Copyright © 2015 BBC. The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.