While the Commerce Department released a report on Friday showing an unexpected slump in housing starts in the month of July, the report also showed a much bigger than expected increase in building permits.
The report said housing starts tumbled by 4.0 percent to an annual rate of 1.191 million from the revised June estimate of 1.241 million.
The drop surprised economists, who had expected housing starts to edge up by 0.3 percent to a rate of 1.257 million from the 1.253 million originally reported for the previous month.
The unexpected decrease in housing starts came as multi-family starts plunged by 16.2 percent to a rate of 315,000, more than offsetting a 1.3 percent increase in single-family starts to a rate of 876,000.
Meanwhile, the Commerce Department said building permits spiked by 8.4 percent to a rate of 1.336 million in July from a revised 1.232 million in June.
Building permits, an indicator of future housing demand, had been expected to jump by 4.1 percent to 1.270 million from the 1.220 million originally reported for the previous month.
Multi-family permits soared by 21.8 percent to a rate of 498,000, while single-family permits climbed by 1.8 percent to a rate of 838,000.
Compared to the same month a year ago, housing starts in July were up by 0.6 percent and building permits were up by 1.5 percent.
On Thursday, the National Association of Home Builders released a separate report showing an unexpected uptick in U.S. homebuilder confidence in the month of August.
The report said the NAHB/Wells Fargo Housing Market Index inched up to 66 in August after ticking up to 65 in July. Economists had expected the index to come in unchanged.
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