WASHINGTON (7/18/14)--Residential construction stumbled in June, as housing starts plummeted 9.3% from the prior month to their slowest pace in nine months, according to data released Thursday by the U.S. Commerce Department (Economy.com July 17).
Single-family home starts dropped 9% to their lowest rate since late 2012, and multifamily construction starts dropped 10%, the second straight double-digit decline after a promising start to the year.
Overall, total housing starts sit 7.5% higher than levels seen a year ago at this time, but multifamily construction has almost entirely fueled those gains.
"The residential construction numbers are disappointing," said Celia Chen, Moody's analyst (Economy.com). "The April rebound has fast faded."
However, the step back in housing starts was concentrated in the South, the nation's largest region, with a 30% drop off month-over-month. Starts actually climbed in the Midwest and Northeast and gained modestly in the West.
Year-over-year, housing starts have swelled in the Midwest and Northeast by 80% and 22% respectively, with modest declines in the West and South.
The report perhaps also reveals the potential for the housing market to rebound in the coming months, as single-family housing permits jumped 2.6% in June, which is its second straight month of ascent.
On the heels of Wednesday's report from the National Association of Home Builders that home builder confidence is improving, rising permit numbers, which often mirror future construction conditions, could signal healthier times ahead.