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. 
| Overnight Avg Rate | Latest | Change | Last Week |
|---|---|---|---|
| 30 yr fixed | 3.77% | 3.60% | |
| 15 yr fixed | 2.88% | 2.74% | |
| 5/1 ARM | 2.66% | 2.54% | |
| 30 yr refi | 3.76% | 3.58% | |
| 15 yr refi | 2.88% | 2.73% |
Today's featured rates:
| Index | Last | Change | % Change |
|---|---|---|---|
| Dow | 15,294.50 | -12.67 | -0.08% |
| Nasdaq | 3,459.42 | -3.88 | -0.11% |
| S&P 500 | 1,650.51 | -4.84 | -0.29% |
| Treasuries | 2.02 | -0.00 | -0.15% |
| Company | Price | Change | % Change |
|---|---|---|---|
| Bank of America Corp... | 13.21 | -0.10 | -0.75% |
| Hewlett-Packard Co | 24.86 | 3.63 | 17.10% |
| Micron Technology In... | 11.40 | 0.47 | 4.30% |
| Dean Foods Co | 20.41 | 0.46 | 2.31% |
| Pfizer Inc | 29.11 | -0.19 | -0.65% |
|
One hero's reward, coming right up. More |
Health insurers in California will charge an average of $304 a month for the cheapest silver-level plan in state-based exchanges next year, according to rates released Thursday by Covered California, which is implementing the Affordable Care Act there. But many residents will pay a lot less than that for coverage. More |
Users are flocking to a new email program. More |
The Obamacare employer mandate forces businesses with 50-plus workers to provide insurance. But many keep getting that cutoff number wrong, saying it's 51. More |
The tornado that struck the Moore, Okla., area Monday afternoon left an almost 2-mile wide path of destruction, flattening homes and businesses and taking at least 24 lives. More |
.
