Groundbreaking for new U.S. single-family homes rose in July despite high mortgage rates and economic uncertainty. Single-family housing starts increased by 2.8% to a rate of 939,000 units, while permits for future single-family homebuilding edged up by 0.5% to 870,000 units.

Overall residential project starts, including apartments, jumped by 5.2% to 1.428 million units, but permit issuance fell by 2.8% to 1.354 million units. Economists had estimated housing starts at 1.290 million and permits at 1.386 million.

President Trump’s import tariffs have kept the Federal Reserve from lowering interest rates, but indications of a softening job market have led to expectations of a rate cut in September. This has helped bring down mortgage rates, with the 30-year fixed-rate mortgage falling to 6.58%.

Mortgage rates are still higher than pre-pandemic levels, dampening demand and increasing housing supply. Builders are cutting prices to attract buyers, with new housing inventory near levels last seen in 2007. Residential investment has contracted in the first and second quarters, affecting overall U.S. economic output.

Read more at Yahoo Finance: US single-family starts, permits rise in July