U.S. homebuilding weakened sharply in July as elevated borrowing costs and unsold inventory continued to pressure the housing market. Total housing starts fell 12.4% to an annualized rate of 1.239 million, below the 1.35 million expected by economists surveyed by Reuters. Single-family starts, which make up most home construction, dropped 9.9% from the prior month to 808,000 units and were down 15.7% from a year earlier. By contrast, permits, a signal of future construction activity, rose 5.0% overall to 1.443 million units, while single-family permits increased 2.5% to 894,000. The data add to signs that the residential real estate market remains under strain from high mortgage rates, limited supply and affordability pressures, even after the contract rate on a 30-year fixed-rate mortgage eased to 6.77% in the week ended August 7 for the first time since mid-June.