Home Construction Pace Gained In June

Builders quickened the pace of home construction in June, but there are signs that high mortgage rates will cause them to tap on the brakes.

“It won’t be a slump, but we won’t have the breakneck pace we saw during the first half of the year,” predicted Fannie Mae economist Eileen Neely. “One indication of a slowdown already is showing up in (declining building) permits.”

But in June, housing starts rose 1.3 percent to 1.48 million at a seasonally adjusted annual rate, higher than the 1.45 million rate many analysts had expected. Single-family construction - 80 percent of total starts - reached a two-year high.

And starts in April and May were even stronger than originally estimated. They totaled 1.51 million in April, rather than 1.50 million, and 1.46 million in May, rather than 1.43 million.

The picture in June was mixed, however, with starts up in the South and West, but down in the Northeast and Midwest.