WASHINGTON (Reuters) -U.S. single-family homebuilding and permits for future construction dropped in August amid a glut of unsold new houses and a softening labor market, shrugging off falling mortgage rates.

Single-family housing starts, which account for the bulk of homebuilding, fell 7.0% to a seasonally adjusted annual rate of 890,000 units last month, the Commerce Department's Census Bureau said on Wednesday. Permits for future single-family homebuilding decreased 2.2% to a rate of 856,000 units.

The rate on the popular 30-year mortgage has dropped to an 11-month low of 6.35% last week from around 7.04% in mid-January, data from mortgage finance agency Freddie Mac showed, as financial markets anticipated the Federal Reserve would resume cutting interest rates this week.

The U.S. central bank is expected to deliver a quarter-percentage-point interest rate cut on Wednesday to support the labor market. The Fed paused its easing cycle in January because of uncertainty over the inflationary impact of President Donald Trump's import tariffs.

The relief from easing mortgage rates is likely to be limited by tepid job gains and rising unemployment as companies hold off hiring because of an uncertain economic outlook.

A National Association of Home Builders survey on Tuesday showed sentiment among homebuilders remained subdued in September, though expectations for higher sales over the next six months improved. Builders are increasingly cutting prices and offering other incentives to reduce the inventory bloat. New housing inventory is near levels last seen in late 2007.