U.S. housing starts and the number of building permits surprisingly declined in June, indicating that the housing market is yet to fully recover after facing headwinds in the final months of 2013.
The housing starts fell 9.3 percent to 893,000 units, the lowest level since September, reported the Commerce Department on Thursday. The starts in April were revised to a much bigger 7.3 percent decline rather than the earlier announced 6.5 percent slump. Economists in a Reuters survey had expected the starts to increase by 1.02 million units in June.
High mortgage costs have weighed on housing growth, while the deficit of properties available for sale has sent prices soaring, making them out of reach for most people.
Nonetheless, some indicators do show that all isn’t lost. A poll released on Wednesday revealed that confidence among builders of single-family homes rose to the highest level in six months in July, with prospects for sales looking good in the next six months.
The starts for single-family homes, which constitute the biggest segment of the housing markets, plunged 9 percent to 575,000 units in June, the lowest level since November 2012, with the groundbreakings for single-family homes in the Southern U.S. falling to their lowest in two years.
The groundbreakings for the much fickle multi-family homes fell 9.9 percent to 318,000 units.
The number of housing permits declined 4.2 percent to 963,000 units in June, lagging economists’ expectations of 1.04 million units. However, since the number of permits issued has exceeded the starts, the groundbreakings will start increasing in the next few months.
Single-family home permits rose 2.6 percent to 631,000 units, the most since November. Those for multi-family homes fell 14.9 percent to 332,000 units. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
To contact the reporter of this story; Jonathan Millet at email@example.com