Home construction fell sharply in July, adding to evidence that elevated construction costs and surging house prices continued to be a headwind for the housing market. Housing starts fell 7 percent to a seasonally adjusted annual rate of 1.534 million units last month, according to a Commerce Department report (pdf). While this is the slowest pace since April, it remained 2.5 percent above the July 2020 figure. Building permits—a leading indicator for future construction—climbed 2.6 percent in July, reversing a three-month falling trend. Still, the gains were confined to the multi-family home segment, with single-family house building permits dropping by 1.7 percent over the month, suggesting little relief from the housing shortage that is driving up prices and increasingly pushing prospective buyers to the sidelines. Homebuilders have been hit by rising material and skilled labor costs, which, combined with a shortage of housing stock, have sent home prices soaring. The …