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Washington (AFP) – The pace of US home building fell to a nine-month low in June as apartment construction plunged, reversing a surge in May, according to government data released Wednesday.

Most of the decline was in the Midwest and South, which saw a pent-up burst of activity in May after a snowy April, the Commerce Department reported.

The result showed home construction had downward momentum at the close of the second quarter.

Total housing starts fell 12.3 percent for the month, the largest dip in almost two years, to an annual rate of 1.17 million units, seasonally adjusted.

Economists had expected a far stronger result of 1.32 million units.

Building permits, a sign of housing supply in the pipeline that is less vulnerable to changes in the weather, also edged down a modest 2.2 percent, also to the lowest level since September.

Construction of mutli-unit dwellings fell more than 20 percent, the largest decrease since November 2016.

The monthly figures are subject to broad margins of error and officials caution trends may take six months to appear.

However, pace of construction last month was 4.2 percent below the same month last year.

Analysts say scarce labor and rising input costs, particularly for lumber, have weighed on the pace of construction.

Decline in demand for mortgages as interest rates rise has also weighed on sales, which could reduce the need to replenish inventories.

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