Builders worked on fewer single-family houses in July, leaving home construction at depressed levels, the U.S. Commerce Department said in a Tuesday report. The Commerce Department said that builders began work on a seasonally adjusted 604,000 homes last month, a 1.5 percent decrease from June. That figure is half the 1.2 million homes per year that economists say must be built to sustain a healthy housing market. Single-family homes, which represent 70 percent of home construction, fell 5 percent. Apartment building rose more than 6 percent. Building permits, a gauge of future construction, declined by 3.2 percent. Though new homes represent just 20 percent of the overall housing market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and about $90,000 in taxes, according to the National Association of Home Builders. New-home sales fell in June to a seasonally adjusted pace of 312,000 homes per year. That is less than half the 700,000 per year that economists consider to be healthy. One reason for the slow pace is that previously occupied homes are a better deal than new homes. The median price of a new home is more than 30 percent higher than the median price for a re-sale-that is over twice the markup in healthy housing market. The National Association of Home Builders said Monday that its survey of industry sentiment was unchanged at 15 this month. The index has been below 20 for all but one month during the past two years. The index is just seven points above the lowest reading on record, in January 2009. Any reading below 50 indicates negative sentiment about the housing market. The index has not reached 50 since April 2006, the peak of the housing boom.
