U.S. housing starts fall sharply in June, suggests slower momentum in housing activity

U.S. housing starts dropped sharply in June. On a sequential basis, housing starts fell 12.3 percent to 1273k, much below consensus expectations. Data was downward revised as well for the months of April and May by a total of 23k.

Taken together, this implies slower momentum in housing activity than was anticipated, noted Barclays in a research report. June’s decline was driven equally by single- and multi-family starts. The former dropped 9.1 percent to 858k, and is the softest print seen this year. Multi-family starts dropped 19.8 percent to 315k.

“Given that this is a typically volatile category, we do not read too much into the decline and would not be surprised to see a reversal in multi-family starts as early as next month”, stated Barclays.

Overall, total housing starts dropped 4.2 percent compared to last year. Region wise, starts dropped in all regions, with the biggest decline in the Midwest. The report released today was softer than anticipated and indicates towards lower private residential construction spending in June.

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