Home construction slumps 4.8% in July

WASHINGTON — Homebuilders pulled back sharply on construction of apartment complexes in July, causing housing starts to tumble to a three-month low.

The Commerce Department said Wednesday that housing starts fell 4.8 percent in July to a seasonally adjusted annual rate of 1.16 million. Groundbreakings for multifamily buildings such as apartments slumped 17.1 percent, while single-family house construction slipped 0.5 percent.

Home construction has increased 2.4 percent year-todate, but the gains have done little to offset the dwindling number of homes listed for sale. The shortage of properties for sale has pushed prices up at a faster pace than income growth, making homeownership less affordable for many would-be buyers.

Stephen Stanley, chief economist at Amherst Pierpont Securities, said that because of the lack of homes on the market, “builders are attempting to meet that need but are hamstrung to a degree by shortages of skilled workers” and land restrictions.

Housing starts dropped in the Northeast, the Midwest and the West but rose modestly in the South.

Building permits, an indicator of future construction, decreased 4.1 percent to 1.22 million.

While home construction has increased, it’s done little to ease the pressure from a decline in listings for previously owned homes — a much larger segment of the housing market.