(Bloomberg) -- New-home construction in the U.S. probably rose in August to the highest level in almost four years, showing residential real estate is sustaining a recovery even as the broader economy sputters, economists said before a report today.
Builders broke ground on 767,000 houses at an annual rate, up from 746,000 in July and the most since October 2008, according to the median estimate of 85 economists surveyed by Bloomberg News. Another report may show sales of existing homes advanced for a second month.
Builders such as Hovnanian Enterprises Inc. (HOV) are gaining confidence as record-low mortgage rates, lower prices and rising rents make buying a house more attractive. At the same time, unemployment, stagnant wages and tight credit remain obstacles to further strengthening in the industry that helped precipitate the recession.
“We expect housing to be a bright spot,” said Yelena Shulyatyeva, a U.S. economist at BNP Paribas in New York. Nonetheless, “there’s still foreclosures, there’s still delinquencies, people are still cutting on mortgage debt.”
The starts data are due from the Commerce Department at 8:30 a.m. in Washington. Estimates in the Bloomberg survey ranged from 740,000 to 800,000. Building permits, a proxy for future construction, may have declined 1.9 percent to a 796,000 annual rate after reaching a four-year high in July, according to the survey median.
At 10 a.m., the National Association of Realtors may report sales of previously owned homes climbed 2 percent to a 4.56 million annual rate in August from 4.47 million the prior month, the survey median showed.
