Housing Starts Drop 9 Percent

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According to a report this morning from the U.S. Commerce Department, U.S. home construction dropped significantly in June, a surprising sign of weakness for a sector that economists had hoped would recover momentum in 2014. Housing starts sank 9.3% last month to a seasonally adjusted annual pace of 893,000, the weakest showing since September 2013. Housing starts, sales of existing homes and home prices are leading economic indicators for the pool and spa market.

It was the second-straight monthly drop and was driven by a nearly 30 percent decline in the South, the largest monthly decrease on record for that part of the country. The report indicated uneven market conditions, however, with some parts of the U.S. showing small increases. And the report also contained some hopeful news, with permits for single-family homes β€” an indicator of future demand β€” rising 2.6% to an annual rate of 631,000, the fastest pace in seven months. 

The state of the housing recovery has been a concern for economists for some time. Earlier this week in her testimony before congress, Federal Reserve Chairwoman Janet Yellen said that the housing sector has β€œshown little recent progress,” and that readings this year β€œcontinued to be disappointing.”

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