Total U.S. housing starts declined 5.3 percent in June to a seasonally adjusted annual rate of 1.850 million units, according to figures released by the U.S. Commerce Department. This was 11.0 percent below the pace of the prior-year period.
Single-family housing starts declined 6.5 percent for the month to 1.486 million units, a 13.8-percent drop from June 2005. Multifamily housing construction increased 0.3 percent for the month to a seasonally adjusted pace of 364,000 units.
"The June declines in single-family starts and permits clearly show that the housing downswing still is underway, a pattern consistent with our signals from the field," said NAHB Chief Economist David Seiders. "Builders are reporting not only systematic declines in home sales, but also increases in sales cancellations and inventories -- due to eroding affordability conditions as well as a withdrawal of investors/speculators from the market."
Three of four regions reported decreases in housing starts for the month. Construction of new homes and apartments was down 11.5 percent in the Northeast, 4.0 percent in the South and 10.2 percent in the West. Housing starts increased 3.0 percent Midwest in June following a large decline the previous month.
"In view of the obvious downward momentum in the housing sector, as well as the considerable downside risks that lie ahead, the Federal Reserve should proceed with great caution as it manages monetary policy in the months ahead," said Seiders.
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