In what’s beginning to become a sustained pattern of ups and downs, the start of construction on new homes in the U.S. fell 9.9 percent in June, according to data from the Commerce Department Wednesday.
June’s stumble likely resuscitates fears that the housing recovery isn’t as healthy as many thought a few months ago. May brought a rebound in home starts of 6.8 percent following a tough April where starts fell nearly 15 percent.
In total, home starts fell in June to a seasonally adjusted annual rate of 836,000—the lowest since August 2012. That rate is still 10.4 percent higher than it was at this point last year.
New apartment construction has been the main reason for gains over the last six months and it was a 27 percent decline in apartment starts that is to blame for June’s overall decline. Single-family home construction also fell in June, down 0.8 percent to a rate of 591,000.
The good news is that overall permits for home construction jumped 7.5 percent in June to a rate of 911,000. That rate is 16.1 percent higher than it was in June 2012. Even better, permits for single-family homes rose to 624,000, the highest rate since May 2008.
That suggests we should see some improvement to the number of home starts and should make economists feel a bit better about the health of the recovery.