Beginning home construction declined in June to a nine-month low as a record plunge in the South swamped gains in the rest of the U.S.
Housing starts fell 9.3% to an 893,000 annualized rate from a 985,000 pace in May that was weaker than initially estimated, figures from the Commerce Department showed today in Washington. The median estimate of 79 economists surveyed by Bloomberg News called for a 1.02 million rate.
Construction slumped 29.6% in the South to a 375,000 pace, the weakest in almost two years.
“There’s a limited portion of the population that’s interested in or able to purchase homes right now,” said Guy Lebas, chief fixed-income strategist at Janney Montgomery Scott. “Although interest rates are still historically low, the increase year-over-year has put a little bit of a slowdown in the sales side of the housing market.”
Estimates for housing starts in the Bloomberg survey ranged from 957,000 to 1.1 million after a previously reported 1 million in May. Building permits decreased 4.2 % in June to a 963,000 annualized rate, after falling in May. They were projected to rise to 1.04 million.
Three of four regions had an increase in total housing starts in June, led by a 28.1% jump in the Midwest to a 219,000 annualized rate, the strongest since August 2007. Construction rose 14.1% in the Northeast and 2.6 % in the West.
Construction of single-family houses declined 9% to a 575,000 rate, the weakest since November 2012, the report showed. The drop was influenced by a 20.1% plunge in the South, the biggest decrease since May 2010.
Work on multifamily homes, such as apartment buildings, fell 9.9% to a 318,000 rate. The figures on multi-unit construction can be volatile month to month.