WASHINGTON — US developers broke ground on new homes at a faster pace in July. But the rise was all due to apartment construction, which is typically volatile. By contrast, builders began work on fewer single-family homes — the bulk of the market — and sought fewer permits to build them.
Friday’s report from the Commerce Department suggests that home building is maintaining its recovery but might be starting to feel the effects of higher mortgage rates.
Last month, builders began work on houses and apartments at a seasonally adjusted annual rate of 896,000, the Commerce Department said. That was up 6 percent from June, though below a recent peak of just over 1 million in March. Construction began on 26 percent more apartments but 2.2 percent fewer single-family houses.
Overall housing starts remain below the 1.5 million-a-year rate that’s consistent with a healthy market
The dip in single-family starts could raise concerns that rising interest rates might start to slow the housing recovery. The average rate on the 30-year loan remained unchanged at 4.4 percent this week — a full percentage point higher than in early May.