Higher mortgage rates could be holding back the momentum of the housing market.
On Friday the Commerce Department said that U.S. housing starts and construction permits rose 5.9% in July to a seasonally adjusted annual rate of 896,000 units. That’s less than expected for the month, during which economists polled by Reuters had predicted new home starts to hit 900,000.
New home permits rose 2.7% in July, to a pace of 943,000, according to Reuters. Economists polled by the news organization had expected permits to his a 945,000 pace.
Meanwhile, unit labor costs rose at a 1.4% rate in the second quarter, according to Reuters – slightly higher than predicted by economists in the poll. Productivity actually fell 1.7% in the first quarter of 2013. Polled experts had expected to see a productivity gain of 0.5%, according to Reuters.