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Aug 18 (Reuters) - U.S. single-family homebuilding fell sharply in July, weighed down by higher mortgage rates and inventory of unsold new homes on the market.
Single-family housing starts, which account for the bulk of homebuilding, dropped 9.9% last month to a seasonally adjusted annual rate of 808,000 units, the Commerce Department’s Census Bureau said on Tuesday. Single-family homebuilding slid 15.7% year-on-year in July.
Permits for future construction of single-family homes rose 2.5% last month to a rate of 894,000 units. They were up 1.1% year-on-year in July.
Total new home starts - including multifamily structures such as apartments - fell 12.4% to 1.239 million in July. Economists polled by Reuters had estimated an annualized rate of 1.35 million.
Overall new issuance of residential construction permits rose 5.0% to a rate of 1.443 million units. Economists had estimated a permit run of 1.37 million.
The residential real estate market remains in a deep rut, with high mortgage interest rates and limited supply of homes on the market hurting affordability and sales rates.
The contract rate on a 30-year fixed-rate mortgage, the most popular U.S. home loan, ticked lower in the week ended August 7 for the first time since mid-June, the Mortgage Bankers Association reported last week. Still, at 6.77% it remains near the highest in more than a year.
On Monday the National Association of Home Builders reported an unexpected uptick in sentiment among construction firms, but their confidence overall remains significantly subdued in the face of economic uncertainty, high mortgage rates and steep building costs aggravated by the U.S.-led war with Iran.
