US housing starts up but analysts remain cautious

[NEW YORK] The housing market in the United States roared in July, but investors may want to tiptoe rather than jump into the sector, analysts and fund managers say.

That is because much of the 15.7 per cent increase in new home construction in July, the first gain in two months, came from apartment buildings, which tend to attract lower income renters and do not generate as much overall economic activity as single-family homes, analysts said.

Furthermore, the solid activity reported in new construction and by Home Depot in its quarterly report on Tuesday may in part be due to activity delayed by bad weather in the first quarter.