Number of homes built drops 1% in July, undermining hopes of a housing recovery

Housebuilding in the United States dropped unexpectedly in July, according to figures from the Commerce Department.

The number of homes built last month fell 1% to an annual rate of 581,000 properties, undermining hopes for a recovery in the housing market.

The figures are below market expectations for 600,000 units and less than the revised 587,000 unit figure for June.

Construction starts for single family homes rose 1.7% to an annual rate of 490,000 units, but the overall figure was dragged down by a 13.3% fall in starts on multi-family units.

New building permits, which indicate future home construction, fell 39.4% compared with the same period last year.

The news comes despite the federal government tax credit stimulus efforts introduced for first-time buyers.

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