The numbers: Construction started on new U.S. homes fell a seasonally adjusted 2% in June to 1.56 million, the Commerce Department said Tuesday. The annual rate of total housing starts fell 6.3% from the previous year.
Construction on homes is at the lowest level since last September.
Economists polled by the Wall Street Journal expected housing starts to rise to a 1.59 million rate from June’s initial estimate of 1.55 million.
In May, housing starts were revised from a drop of 14.4% to 1.55 million to a drop of 11.9% of 1.59 million.
Building permits for new homes fell 0.6% to 1.69 million in June. Economists expected building permits to fall to a 1.68 million rate from May’s initial estimate of 1.7 million.
Key details: On an unadjusted basis, housing starts fell 0.7% in June.
The construction pace for single-family homes fell 8.1% in June, while apartment starts jumped 15%.
Permits for single-family homes fell 8% in June, while permits in buildings with at least five units rose 13.1%.
Big picture: Even though demand for homes in the U.S. is cooling, “builders will remain busy for some time working down backlogs of unfilled orders, even allowing for rising cancellations,” said Richard Moody, chief economist at Regions Financial.
Market reaction: U.S. stocks
were trading lower before the market opened on Tuesday. The yield on the 10-year Treasury note
fell to 2.97%.