After reporting a sharp increase in new residential construction in the U.S. in the previous month, the Commerce Department released a report on Wednesday showing a much steeper than expected pullback in housing starts in the month of June.
The Commerce Department said housing starts plunged by 12.3 percent to an annual rate of 1.173 million in June after jumping by 4.8 percent to a revised rate of 1.337 million in May.
Economists had expected housing starts to drop by 2.2 percent to a rate of 1.320 million from the 1.350 million originally reported for the previous month.
The report also said building permits fell by 2.2 percent to an annual rate of 1.273 million in June after tumbling by 4.6 percent to a rate of 1.301 million in May.
Building permits, an indicator of future housing demand, had been expected to climb by 2.2 percent to a rate of 1.330 million.