The pace of Colorado Springs-area homebuilding rose slightly in July, a sign that the housing market remains strong as it heads into the second half of the year.

The Pikes Peak Regional Building Department issued 269 permits to builders and individuals last month for the construction of single-family homes in El Paso County, according to a report the agency issued Tuesday. July's total increased 3.5 percent over the same month last year, the report showed.

Mortgage rates that have hovered around 4 percent for long-term, fixed-rate loans continue to drive the new home market, economists and builders have said. Last week, 30-year mortgage rates averaged 3.92 percent nationwide, according to mortgage buyer Freddie Mac.

Also, a better economy in the Pikes Peak region and more jobs are helping to boost demand, industry experts have said.

Another plus for the new home market: A tight supply of houses available on the resale side of the local housing market has led some buyers to purchase new homes. And, some Denver-area employees are commuting to their jobs and buying new homes in the Springs and El Paso County, where housing costs are tens of thousands of dollars cheaper.

Home construction is one of several key economic indicators in the Pikes Peak region. The industry employs thousands of workers, while sales taxes collected on the purchase of building materials pump millions into local government coffers for the funding of roads, parks and other basic services.