We just some discouraging data from the housing market.
Housing starts unexpectedly plunged 9.3% to an annualized rate of 893,000.
Building permits unexpectedly fell 4.2% to 963,000.
Economists estimated starts would climb by 1.9% and permits would gain 3.0%.
This comes despite low mortgage rates and limited supply in the housing market.
"The decrease was concentrated in the South, where starts fell 29.6% m/m; starts rose in the other three regions," noted Barclays' Dean Maki. "It is unclear what led to the sharp decline in housing starts in the South in June, but the rise in single-family permits in June and the increases in the NAHB homebuilders index in June and July suggest that starts will increase in the coming months. It is also worth highlighting that housing starts rose an annualized 26.2% in Q2 14 after plunging in Q1 14 due to adverse weather conditions, so residential investment is still likely to make a positive contribution to Q2 14 real GDP growth, despite the weakness in June."
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