US home construction fell 9.3 per cent in June, a surprising sign of weakness for a sector that has struggled to maintain momentum over the past year.
Housing starts sank last month to a seasonally adjusted annual pace of 893,000, the weakest showing since September 2013, the Commerce Department said Thursday. It was the second-straight monthly drop and was driven by a nearly 30 per cent decline in the South.
Other parts of the country posted increases. The report showed that the path to recovery for the housing industry remains bumpy.
Despite that report, several recent signs have pointed to the housing market regaining its footing. Sales of previously owned homes, the broadest measure of housing demand, rose in May to the highest level since October, and sales of newly built homes that month rose to the highest level in six years.
US Housing Starts
The pace of American construction for May was revised lower, showing a 7.3 per cent decline, that month, compared with an initially reported 6.5 per cent decrease, the Commerce Department said.
New applications for building permits, a bellwether of future construction, declined 4.2 per cent in June from the prior month to a pace of 963,000, the lowest figure since January.
The decline in construction was driven by a 9 per cent drop in single-family homes and a nearly 10 per cent drop in apartments and condominiums homes with at least two units.
There were small bright spots in the data, as permits for single-family homes were up 2.6 per cent from the prior month and housing starts were up 7.5 per cent from a year earlier.