U.S. single-family home construction fell again in June, but activity is likely to pick up in coming months amid growing optimism that the Federal Reserve will implement a long-awaited interest rate cut in September.
Single-family housing starts, which account for the bulk of housing construction, fell 2.2 percent to a seasonally adjusted annual rate of 980,000 units last month, the Commerce Department’s Census Bureau reported Wednesday.
Permits for future construction of single-family homes fell 2.3% to 934,000 units.
Single-family housing starts rose 5.4% year-over-year in June. Housing construction was strong for much of last year and into the first quarter of 2024 amid a shortage of existing homes on the market.
But the momentum faded as the average rate on 30-year fixed-rate mortgages rose above 7% again in April amid high inflation and a strong economy.
With inflation on the decline and financial markets expecting a rate cut in September, followed by further cuts in November and December, mortgage rates have been trending lower.
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