Construction on new homes slowed in July, highlighting the continued weakness of the housing sector as the economy struggles to recover.
Housing starts fell to a 604,000 seasonally adjusted annual rate in July, down 1.5 percent from June but exceeding the 600,000 predicted by economists who were surveyed by Reuters. The number remained below the 1 million to 1.5 million level economists say would indicate a healthy market.
The pace of new home construction came in well above the July 2010 rate of 550,000, indicating that some of the pressure from unsold and foreclosed homes, which create a disincentive for builders to break new ground, may be lifting.
Building permits, which indicate future construction, fell slightly from June’s revised 617,000 to 597,000 at a seasonally adjusted annual rate.