New-Home Construction Up 5.9% in July
Builders started construction on single-family homes at the slowest pace in eight months, underscoring worries that higher mortgage rates could restrain the housing sector's upturn.</br></br>Starts of single-family homes fell 2.2% in July from a month earlier to an annual rate of 591,000, the Commerce Department said Friday. That ended two months of gains and marked the lowest level of single-family starts since November.</br></br>The latest pullback, while modest, came against expectations for an increase given strong sales and industry surveys showing a surge in home builders' confidence.</br></br>Slipping activity could be a sign that the jump in mortgage rates since the spring is starting to spook potential buyers, or making builders reluctant to break ground on homes that might not sell. The average rate on a 30-year mortgage has risen nearly a point since April to 4.4%, though it still remains low by historical standards.</br></br>"Today's report shows that the recent spike in mortgage rates is indeed slowing the housing market," analysts at BTIG LLC wrote in a note to clients. "However, an optimistic take on recent data would suggest the hit being taken is not nearly as bad as some had feared, at least not yet."