Wood products companies, appliance manufacturers, and furniture producers take note: The cooling U.S. housing market turned just plain chilly in June.
Starts for privately owned homes were at a seasonally adjusted annual rate of 1.85 million units in June, 5.3% below May's revised figure of 1.953 million and 11% below the June 2005 rate of 2.078 million, the U.S. Commerce Department and U.S. Department of Housing and Urban Development jointly reported on July 19.
Economists generally had been looking for a June 2006 starts rate of 1.9 million.
The start rate for single-family homes was 1.468 million units in June, 6.5% below the May rate of 1.59 million. June starts on housing of five or more units were at an annual rate of 306,000, down 4.1% from May's rate of 319,000.
Issuance of building permits, an indicator of future housing construction, was down in June as well, falling to a seasonally adjusted annual rate of 1.862 million, 4.3% below the revised May rate of 1.946 million and 14.9% below the June 2005 rate of 2.188 million.
Starts and permits are closely watched indicators, because housing and housing-related business account for about 20% of all U.S. economic activity.