U.S. housing starts and building permits unexpectedly fell in June, suggesting the housing market recovery was struggling to get back on track after stalling in late 2013.
Groundbreaking declined 9.3 per cent to a seasonally adjusted annual 893,000 million unit-pace, the lowest since September, the Commerce Department said on Thursday. April’s starts were revised to show a steeper 7.3 per cent fall instead of the previously reported 6.5 per cent 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 per cent 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 per cent to a 318,000-unit rate.
Permits fell 4.2 per cent 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 per cent to a 631,000 unit-pace, the highest level since November. Permits for multi-family housing tumbled 14.9 per cent to a 332,000-unit pace.
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