U.S. construction spending increased solidly in July as a shortage of houses on the market boosted outlays on single-family housing projects.

The Commerce Department said on Friday that construction spending rose 0.7%. Data for June was revised slightly higher to show construction spending increasing 0.6% instead of 0.5% as previously reported. Economists polled by Reuters had forecast construction spending increasing 0.5%.

Construction spending increased 5.5% on a year-on-year basis in July. Spending on private construction projects rose 1.0%, with investment in residential construction advancing 1.4% after increasing 1.5% in the prior month. Private construction spending rose 0.6% in June.

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