U.S. Housing Starts Rose in June Amid Tight Inventories and Rising Costs

Construction of new homes in the U.S. increased in June for the second consecutive month amid rising material and labor costs, according to data from the Commerce Department released Tuesday. Here are the main takeaways from the report:

--Housing starts, a measure of U.S. homebuilding, rose 6.3% in June compared with May, to a seasonally adjusted annual rate of 1.643 million. The reading beat the consensus forecast from The Wall Street Journal poll of economists, who expected starts to rise 1.1% to an annual pace of 1.59 million.

--The current level of starts is 29.1% up compared with the same month a year earlier.

--In May, housing starts came in at a revised 1.546 million from an earlier estimate of 1.572 million.

--Monthly housing starts data are volatile and are often revised. June data came with a margin of error of 11.5 percentage points.

--Residential permits, which can be a bellwether for future home construction, dropped 5.1% in June compared with May, to a seasonally adjusted annual rate of 1.598 million. The figure is below economists' forecasts of a 0.1% decline to an annual pace of 1.68 million.

--U.S. housing starts report for June compares with July's indicator compiled by the National Association of Home Builders, which showed confidence in the single-family housing market decreasing slightly.

--Housing rebounded strongly during the Covid-19 pandemic, lifted by shifting consumer demand in search for more space and low mortgage rates. However, inventory shortages and high input costs in recent months are lifting house prices, a constraint for both builders and buyers, economists say.

Write to Xavier Fontdegloria at xavier.fontdegloria@wsj.com

  (END) Dow Jones Newswires
  07-20-21 0858ET
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