U.S. new-home construction surged in July.
Housing starts jumped 23% from June to an annual pace of almost 1.5 million, a reflection of rock-bottom interest rates and strong demand from buyers.
Construction activity bottomed out in April amid Covid-19 lockdowns and broader uncertainty but has since mostly returned to prepandemic levels—July's pace came in ahead of the 2019 average for starts. That augurs well for the recovery. Construction employment and consumer spending on furniture, appliances and home improvement have outperformed other sectors, helping buoy gross domestic product.
"Although housing accounts for a small share of GDP, its impact on the broader economy is wide," said Berenberg Capital Markets economist Roiana Reid.