The Commerce Department says housing starts dropped 5.0% to a seasonally adjusted annual rate of 549,000 units, the lowest level since October. It was the second straight month of decline in activity and was well below market expectations. Compared to June last year, starts were down 5.8%, the biggest decline since November. Driving the June decline was a more than 20% drop in the volatile condominium and apartment market. Construction of single-family homes, the biggest part of the market, was down slightly by 0.7%.  Plus, May’s housing starts were previously reported as a 10.0% drop, but are now revised down to show a 14.9% decline.
Sal Guatieri, senior economist at BMO Capital Markets said: “Despite record low mortgage rates, housing is at risk of a double dip unless job growth strengthens soon.”
In a typical economic recovery, the construction sector provides much of the fuel. But not this time.
