By Harriet Torry and Sarah Chaney 

Home building in the U.S. declined in June, a fresh sign of weakness in the housing market.

Housing starts, a measure of new home construction, fell 0.9% in June from the prior month to a seasonally adjusted annual rate of 1.253 million, the Commerce Department said Wednesday.

Residential building permits, which can signal how much construction is in the pipeline, dropped 6.1% from May to an annual pace of 1.220 million. That was the biggest monthly drop since March 2016.

Economists surveyed by The Wall Street Journal had expected a 0.7% decrease for starts and a 0.3% decrease for permits.

Housing-starts data are volatile from month to month and can be subject to large revisions. June's 0.9% decline for starts came with a margin of error of 7.9 percentage points.

Starts were up 6.2% from June last year. Building permits were down 6.6% from June 2018.

The overall housing sector has struggled with high prices and low inventory, even with a strong labor market, low borrowing costs and rising incomes.

The average rate on a 30-year, fixed-rate mortgage eased further in June to 3.73% in the final week of the month, according to Freddie Mac, the lowest rate since late 2016.

Cooling mortgage rates in recent months could be nudging the housing market toward a modest spring performance. Sales of previously owned homes rose 2.5% in May from the prior month, the National Association of Realtors said last month.

The Commerce report can be found at http://www.census.gov/construction/nrc/pdf/newresconst.pdf

(END) Dow Jones Newswires

July 17, 2019 08:45 ET (12:45 GMT)

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