U.S. housing in broad-based recovery
Housing starts in July surge to a near 8-year high
The U.S. economy appears to have entered the third quarter on a firm footing, with several housing-related data reports signalling a robust recovery in the American housing market.
U.S. housing starts in July surged to a near eight-year high, the U.S. Commerce Department said Tuesday, thanks to a surge in the construction of single-family homes.
In the first seven months of the year, U.S. housing starts were up more than 11 per cent over the same period last year.
Economists say improving employment prospects — with almost 3 million jobs added in the past year — and relatively low mortgage rates are giving Americans more confidence to buy.
"Perhaps the most encouraging element of the [Commerce Department] report was the strength exhibited by the single family segment, with home builders breaking ground on nearly 50,000 more single family homes in July than at any prior point during the recovery," said TD senior economist Michael Dolega in a note.
"A continuation of improvement in this previously lagging segment would be a clear signal that confidence and incomes gains are finally manifesting in the housing market."
Home sales and rentals booming
The strong housing starts report is just the latest economic report to signal that the U.S. housing market is in a definite expansion mood. An index that tracks confidence among U.S. home builders hit an almost 10-year high this month and the real estate firm Zillow says rental prices in the U.S. are now rising at more than twice the rate of hourly wage growth.
Existing homes are also selling at the fastest pace since early 2007, according to the National Association of Realtors.
Home Depot, the world's biggest home improvement retailer, cited that U.S. housing recovery when it reported better than expected earnings Tuesday.
The retailer boosted its sales and profit outlook for the second time this year as it reported second-quarter revenue of $24.8 billion US and profits of $2.23 billion. The company said U.S. homeowners are spending more because they're more confident.
"When consumers believe their home is an investment and not an expense, they spend differently," Home Depot chief financial officer Carol Tome said during a conference call.
Home Deport shares hit a record high in early NYSE trading Tuesday.
With files from Reuters and The Associated Press