WASHINGTON — Two straight months of declines in home-building activity suggest that the housing market may finally be cooling off.
Housing starts unexpectedly fell 2.7% last month, to a seasonally adjusted annual rate of 1.649 million, after a revised 2.7% decline in June, the Commerce Department said.
The July figures are weaker than Wall Street had expected. A Dow Jones Newswires-CNBC poll of economists had predicted that housing starts would rise 0.5%, to a 1.68 million annual rate.
June’s decline had first been reported as 3.6%. May’s gain was revised to 11.2%, from 10.8%.
Despite the two-month drop, home-building activity remains high. The housing sector has defied analysts’ expectations by weathering the economic recession that began in March 2001.
Mortgage rates dropped into record low territory this month, suggesting that the housing market will remain healthy for the foreseeable future. Freddie Mac reported this week that the average for 30-year fixed-rate mortgages reached an all-time low of 6.22%.
However, building permits — a barometer of future activity — fell for the first time in four months in July, dropping 0.5%, to a 1.698 million annual rate.
