U.S. Housing Starts Rise Sharply in August

Housing starts in the U.S. posted a sharp 10.5% increase in August to an annualized pace of 598K units, greatly surpassing expectations for a small 0.7% gain going into the report. The increase represents the second consecutive monthly gain and the largest since November 2009. As well, encouraging news was also conveyed by building permits which rose 1.8% to an annualized 569K and compared to an anticipated 560K. Today’s report suggests that the housing market is starting to show signs of stabilizing, however, it does little to alter the fact that the level of activity is still indicative of depressed housing market conditions. The weakness in the sector over the summer can partly be attributed to the first-time home buyer’s rebates that ended in April that brought sales forward from the traditional selling season. This is a report from RBC Economics.