Housing starts plunge sharply in June

Housing starts swoon

Groundbreaking declined 9.3 percent to a seasonally adjusted annual 893,000 million unit-pace, the lowest since September, the Commerce Department said.

April's starts were revised to show a steeper 7.3 percent fall instead of the previously reported 6.5 percent drop.

Economists polled by Reuters had forecast starts rising to a 1.02 million-unit rate last month.

Housing has been constrained by higher mortgage rates. A shortage of properties for sale has pushed up prices, reducing affordability for many.

But there are glimmers of hope for the sector. A survey on Wednesday showed confidence among single-family home builders hit a six-month high in July, amid optimism over sales over the next six months.

Groundbreaking for single-family homes, the largest part of the market, tumbled 9.0 percent in June to a 575,000-unit pace, the lowest since November 2012. Single-family starts in the South dropped to their lowest level in two years.

Starts for the volatile multi-family homes segment dropped 9.9 percent to a 318,000-unit rate.
Permits fell 4.2 percent to a 963,000-unit pace in June. Economists had expected them to rise to a 1.04-million unit pace. With permits now leading starts, groundbreaking could pick up in the months ahead.

Permits for single-family homes increased 2.6 percent to a 631,000 unit-pace, the highest level since November. Permits for multi-family housing tumbled 14.9 percent to a 332,000-unit pace.

--By Reuters

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