July 25 (Bloomberg) -- Copper fell the most in four weeks in New York as a slowdown in homebuilding damps demand in the U.S., the world's second-largest consumer of the metal.

Home resales in the U.S. fell for a fourth straight month in June, a sign that housing remained mired in the worst slump in 16 years. Copper has fallen 12 percent since reaching a record high in May 2006 as a decline in U.S. home construction curbs use of the metal in pipes and wiring.

``The housing market is not looking very healthy,'' said Patrick Chidley, an analyst at Barnard Jacobs Mellet LLC in Stamford, Connecticut. ``U.S. construction activity is one of the biggest indicators for copper demand.''

Copper futures for September delivery dropped 5.95 cents, or 1.6 percent, to $3.56 a pound at 10:06 a.m. on the Comex division of the New York Mercantile Exchange. A close at that price would mark the biggest drop since June 26. Before today, the metal had gained 26 percent this year as global demand outpaced mine production.

Purchases of existing homes declined 3.8 percent last month to an annual rate of 5.75 million, the slowest pace since November 2002, from a revised 5.98 million in May, the National Association of Realtors said today in Washington. Building permits in June fell to the lowest level in a decade, the Commerce Department said July 18.

Chile Strikes

Declines in residential construction reduced U.S. copper consumption by 6 percent in 2006, according to the International Copper Study Group. Builders are the biggest users of the metal, putting about 400 pounds into the average U.S. home. China is the world's biggest consumer of the metal.

Copper also fell as strike threats eased in Chile, the world's largest source of the metal. State-owned Codelco, the world's biggest copper producer, met yesterday with representatives of the Confederation of Copper Workers, which organized a strike of contractors' employees that began June 25.

The walkout has disrupted output at three of Codelco's mines. Codelco earlier reached an agreement with almost two- thirds of workers for the company's contractors that will improve their benefits and bonuses.

``There's uncertainty about how long the strike in Chile is going to last,'' Chidley said.

On the London Metal Exchange, copper for delivery in three months fell $125, or 1.6 percent, to $7,835 a metric ton. The metal rose to a record $8,800 a ton in May 2006.

A futures contract is an obligation to buy or sell a commodity at a fixed price for delivery by a specific date.

To contact the reporter on the story: Millie Munshi in New York at mmunshi@bloomberg.net.

Last Updated: July 25, 2007 10:41 EDT