New Home Building Ticks Upward

Housing starts rose 0.9 percent in August

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Construction of new homes in the U.S. accelerated in August by nearly 1%, to a seasonally adjusted annual rate of 891,000, The Wall Street Journal reports.

The increase was driven largely by a 7% increase in construction of single-family homes, while groundbreaking on multi-family dwellings decreased slightly.

New home construction—particularly starts of single-family dwellings—are considered a reliable measure of the health of the real estate market, a key driver of the overall economy.

New home construction aside, demand may be softening in the housing market, as buyers face the prospect that the era of record-low mortgage rates may be coming to an end. The Fed is expected to announce this week the scaling back of its bond-buying programs, known as quantitative easing, which have kept mortgage rates artificially low in recent years.

[The Wall Street Journal]