U.S. housing starts fell 4.0% in July, driven by a decline in the construction of apartment buildings.
The Commerce Department said Friday that housing starts slipped last month to a seasonally adjusted annual rate of 1.19 million units. So far this year, housing starts have declined 3.1%. While there was a slight 1.3% uptick in the construction of single-family homes last month, the gain was offset by a 17.2% drop in the apartment category.
The construction slowdown is thwarting prospective homebuyers. The solid job market and falling mortgage rates have boosted interest among people seeking homes, yet the inventory shortage and rising prices have stifled sales.
The July construction report suggests that builders are possibly preparing for more renters.
Applications for housing permits, an indicator of future construction, rose 8.4% to an annual rate of 1.34 million. Apartment complexes accounted for almost all of the increase.