Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

New home construction rises, but outlook weakens

By Julianne Pepitone, staff reporter


NEW YORK (CNNMoney.com) -- New home construction ticked higher in July, but indications of future building were weak, the government said Tuesday.

Housing starts rose 1.7% from June to a seasonally adjusted annual rate of 546,000 last month, the Commerce Department said.

Economists were expecting housing starts to rise to 555,000, according to a consensus estimate from Briefing.com.

On a year-over-year basis, starts fell 7% from July 2009.

"Activity in the housing market is likely to remain depressed for several years," Paul Ashworth, U.S. economist at Capital Economics, said in a research note. "Housing is not going to lead the economic recovery."

Future activity: Applications for building permits, a gauge of future construction activity, fell over the month. Permits dropped to a seasonally adjusted annual rate of 565,000 in July, down 3.1% from a revised 583,000 in June.

Economists were expecting a more modest drop to 573,000. Permits were down 3.7% from the same time last year.

"[The permits figure] is not an encouraging sign," Ashworth said. "The 'good' news, however, is that housing is so depressed it is hard to see activity falling much further from such a severely depressed level."

New homes by sector: New construction of single-family homes, the key sector of the housing market, fell 1.2% over the month to an annual rate of 421,000.

The annual rate for new construction of multi-family homes - buildings with 5 or more units - was 129,000. To top of page


Overnight Avg Rate Latest Change Last Week
30 yr fixed3.36%3.43%
15 yr fixed2.65%2.69%
5/1 ARM2.87%2.93%
30 yr refi3.40%3.46%
15 yr refi2.69%2.73%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 18,432.24 -24.11 -0.13%
Nasdaq 5,162.13 7.15 0.14%
S&P 500 2,173.60 3.54 0.16%
Treasuries 1.46 -0.05 -3.51%
Data as of 1:46pm ET
Company Price Change % Change
KeyCorp 11.70 0.05 0.43%
Bank of America Corp... 14.49 -0.19 -1.29%
Ford Motor Co 12.66 -0.05 -0.39%
General Electric Co 31.14 -0.11 -0.35%
Chesapeake Energy Co... 5.42 0.23 4.43%
Data as of Jul 29

Sections

For the first time ever, Amazon and Facebook are more valuable than Berkshire Hathaway, the storied company run by legendary investor Warren Buffett. More

Venezuela's government issues a decree recently that makes it possible to force workers to work in the country's fields amid food shortages. More

Sheryl Sandberg says she supports Hillary Clinton for president, because she would help close the gender gap, and because she's 'the most qualified candidate.' More

It's about to get harder for some luxury all-cash home buyers to hide their identity from the U.S. government. More