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US new home construction drops in June

Property Here - Thursday, July 18, 2013

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New home construction in the United States dropped significantly in the month of June, according to the Commerce Department.

Housing starts declined by 9.9 percent on May figures to a seasonally adjusted annual rate of 836,000 units, with building permits also dropping 7.5 percent.

The decline was primarily attributed to a 26 percent drop in multifamily housing, a category that has recently indicated signs of overbuilding. 

Single-family home starts, which account for the bulk of the activity, declined 0.8 percent while single-family permits climbed 0.1 percent.

Despite the decline, Moody's Analytics economist Celia Chen said the outlook for housing was still bright, describing the June data as “more of a hiccup.”

The continuous increase of single-unit permits, which account for the bulk of the market, is used by some as a better indicator of the health of the housing industry.

“The modest increase in single-family permits is indicative of steady demand trends on the ground, though the relative weakness in starts over the past several months gives us a bit of pause,” noted economists at Credit Suisse.

Recently, the National Association of Home Builders reported an increase in home-builder confidence to 57, the third consecutive monthly up-tick and the highest since January 2006.