July housing starts at highest rate since 1986

The Commerce Department has announced that home builders broke ground in July at their fastest pace since 1986. The report showed that housing starts rose 1.5 percent in July to a seasonally adjusted 1.872 million annual rate. Starts of single-family homes, at a 1.521 million annual rate, were the highest since November 1978.

The report did include one cautionary sign. Permits for new homes -- an indicator of future building -- dipped 2.4 percent to 1.780 million annual pace.

Starts in the West were down 13.9 percent to a 434,000 annual rate. In the South starts rose to an 872,000 annual rate, a gain of 5.6 percent. The Midwest starts rose by 5.7 percent to a 372,000 pace.