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U.S. Housing Rebound Dented by Decrease in Starts

The residential real-estate rebound suffered a setback in June as housing starts unexpectedly fell to the lowest level in almost a year, curbing how much construction contributed to U.S. economic growth last quarter.

Work began on 836,000 houses at an annualized rate, the least since August and down 9.9 percent from a revised 928,000 pace in May, figures from the Commerce Department showed today in Washington. The drop was led by a 26.2 percent plunge in multifamily projects, which are more volatile than work on single-family homes.

The figures were in contrast to a report yesterday showing homebuilders this month were the most optimistic in seven years as sales improved, indicating the reversal will probably prove temporary. The slump came as Federal Reserve Chairman Ben S. Bernanke said monthly asset purchases aimed at spurring the economy could be reduced or expanded as conditions warrant, with housing one area policy makers will monitor.

Bloomberg [1]

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