Housing Starts, Permits Fell in June

Washington, DC, July 20, 2010--Housing starts fell sharply in June after a federal tax credit for buyers expired, according to Commerce Department data released Tuesday.

After a 15% drop in May, housing starts fell another 5% in June to a seasonally adjusted annual rate of 549,000, the lowest level in eight months, the Commerce Department estimated.

The decline was larger than the 3% decline to 575,000 starts that economists had expected. The government's estimate of starts for May was revised to 578,000, down from the 593,000 originally reported.

Starts were down 5.8% compared with June 2009, and were down about 75% from the peak in 2006.

The number of homes under construction also fell, dropping to a record-low 450,000 at the end of June.

Completions surged a record 26% last month to an annualized rate of 886,000.

Building permits, which are considered a forward indicator of housing construction, rose 2.1% on the month, due to a 20% gain in permits for multi-family units.

Permits for single-family homes fell 3.4% to a seasonally adjusted annual rate of 421,000, the lowest level since April 2009.