WASHINGTON (AP) — Home construction fell a sharp 7% in July as homebuilders struggled to cope with a variety of headwinds.
The July decline put home construction at a seasonally adjusted annual rate of 1.53 million units, the Commerce Department reported Wednesday. It was the slowest pace since April but was 2.5% higher than a year ago.
Applications for building permits, which can forecast future activity, rose 2.6% in July from the June level to an annual rate of 1.64 million units. It was the first monthly increase in permit applications since March.
Construction starts for single-family homes fell 4.9% in July to an annual rate of 1.11 million while construction of apartments of five units or more dropped 13.6% to a rate of 412,000 units.
Home construction was down in every part of the country except the South where housing starts rose 2.1%. The biggest decline was in the Northeast, a drop of 49.3%, followed by declines of 11.3% in the West and 6.9% in the Midwest.
According to a survey of builder confidence, expectations fell sharply in August to the lowest level in a year as builders struggled with high costs, supply shortages and rising home prices. Expectations dropped five points to a reading of 75 in the National Association of Home Builders/Wells Fargo survey.