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 fixed3.93%4.14%
15 yr fixed3.03%3.14%
5/1 ARM3.32%3.28%
30 yr refi4.02%4.21%
15 yr refi3.11%3.21%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 17,716.45 -29.53 -0.17%
Nasdaq 5,138.74 9.95 0.19%
S&P 500 2,107.78 -0.85 -0.04%
Treasuries 2.20 -0.06 -2.87%
Data as of 1:34pm ET
Company Price Change % Change
Bank of America Corp... 17.99 -0.14 -0.77%
Facebook Inc 95.11 -0.10 -0.11%
Micron Technology In... 19.05 -0.85 -4.27%
Apple Inc 121.47 -0.90 -0.74%
Ford Motor Co 14.87 -0.23 -1.52%
Data as of 1:19pm ET

Sections

Some families are outraged at the sums they've been offered by Lufthansa as compensation for the Germanwings plane crash in March which killed 150 people. More

Uber promises to pour $1 billion into India over next nine months, says the market is a global priority. More

Fast-food chains that operate in more than 30 locations nationwide are the sole target of a new rule in New York to hike their minimum wage to $15. But consumers and small business owners, as well as some employees, may be the ones to pay the price. More

You can't blame it on the economy anymore. More Millennials now have jobs, but are still living at home. More