US housing starts 'fall less than expected'

The number of housing starts in the US fell by 1.5 per cent in July compared to June, a much smaller drop than analysts had been anticipating.

Figures published by the US Department of Commerce also revealed that permits for new dwellings were lower last month, declining by 3.2 per cent.

Acting US commerce secretary Rebecca Blank noted: "There are still a significant number of foreclosed homes on the market across the country, making it more difficult for the new housing market to grow."

Earlier this month, Dr Stan Humpries, chief economist at Zillow, predicted that foreclosures, in addition to variable demand for properties and negative equity, will weigh US residential real estate prices down until 2012.

He stated that there is a "bumpy road ahead", continuing "there will be many ups and downs in home values before this is over".

Data published by Zillow at the start of the month revealed that property prices dropped by 0.4 per cent between the first and second quarters of this year.
 

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