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


Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Overnight Avg Rate Latest Change Last Week
30 yr fixed3.90%3.90%
15 yr fixed3.02%3.07%
5/1 ARM3.00%3.14%
30 yr refi3.97%3.96%
15 yr refi3.07%3.12%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 18,010.68 -115.44 -0.64%
Nasdaq 5,070.03 -27.95 -0.55%
S&P 500 2,107.39 -13.40 -0.63%
Treasuries 2.09 -0.04 -1.64%
Data as of 3:15pm ET
Company Price Change % Change
Bank of America Corp... 16.50 -0.17 -1.02%
Apple Inc 130.28 -1.50 -1.14%
Pfizer Inc 34.75 0.31 0.90%
Intel Corp 34.46 0.45 1.32%
General Electric Co 27.27 -0.36 -1.30%
Data as of May 29

Sections

Ed Gilligan spent his entire 35-year career with American Express, starting as an intern ad rising to one of the highest executive posts at the bank. More

The U.S. economy lost ground in the first quarter, but it is already showing signs of life. More

Brit Morin is a DIY queen. Her startup Brit + Co. inspires women and girls to be creative -- and just raised $23 million in funding. More