Single-Family Starts Fall Again

Single-family housing starts fell by 6.5% in June to a seasonally adjusted annual rate of 1.486 million units, according to new figures released by the Commerce Department.In the Northeast, starts plunged by 32.8% (from the level in May), with some of the decline being blamed on harsh rainstorms in the region. Compared with those of the same month a year ago, starts fell 13.8% nationwide. "The clear downtrend in permits suggests that builders are scaling back their plans for new construction in the months ahead in the face of declining orders and higher cancellation rates," said Greenwich Capital analyst Omair Sharif. Total starts (which include multifamily) fell by 5.3% in June. Meanwhile, builder confidence (as tracked by the National Association of Home Builders) fell again, and a new report by Merrill Lynch is telling equity investors to avoid buying homebuilding stocks. "It still seems too late in the economic and interest rate cycles to overweight the group," Merrill says in a new report.