U.S. residential construction drops in July

Builders started work on fewer new homes in July, with the national figure down 1.5 percent to a seasonally adjusted annual rate of 604,000 units, according to a report released today by the U.S. Commerce Department.

Permits for new housing units fell 3.2 percent following a small increase in June, a surprise for private-sector analysts who had expected a 1.8 percent decline. The decrease was driven by multi-family homes with five or more units, the Commerce Department said. Permits for single-family homes and those with two to four units both increased.

“There are still a significant number of foreclosed homes on the market across the country, making it more difficult for the new housing market to grow,” acting U.S. Commerce Secretary Rebecca Blank said. “Our focus is on job creation, because as more people find employment in good paying jobs, they will become more likely to invest in a home — driving the inventory of foreclosed homes down and the construction of new homes up.”

Privately owned housing completions reached 470,000 in July, a 6.1 percent increase over June, during which 569,000 homes were completed, on an annually adjusted basis. The figure marks a 9.5 percent increase since the same period in 2010. — Katherine Clarke