Housing Starts Slow in June, but Not in Calif.

Construction of homes and apartments nationwide slipped in June to the lowest level in just over a year, though home building in California continued to thrive, local experts said.

The Commerce Department reported Wednesday that work began last month on 1.57 million units, seasonally adjusted and annualized, a drop of 5.6% from May.

The West suffered the biggest decline in housing starts, falling 14.8% in June over the previous month. The West, as defined by the Commerce Department, encompasses 13 states from Alaska to New Mexico to Montana.

But local building industry experts said the department’s statistics do not reflect California’s current home-building market.

Housing permits in California rose 7.7% in May over the month before, said Ben Bartolotto, research director for the Construction Industry Research Board.

Those numbers are a good indicator that housing starts in the state would actually have been up in June over May, contrary to what the Commerce Department’s numbers show for the Western region as a whole.

Two-thirds of the time, builders begin construction on their projects either in the same month their permits are issued or in the following month, Bartolotto said.

The Commerce Department’s data about individual states’ building permits will not be released until later this month, a spokesman said.

John Burns, a manager for building industry consultants Meyers Group, said California is not seeing a slowdown. The government’s figures, he said, could indicate that builders in other Western states are worried that rising mortgage rates will prevent some entry-level shoppers from buying.

But, he said, “the housing market in California is really driven by the move-up buyer, who is not particularly interest-rate-sensitive.” Nationally, June’s activity--while still brisk--marked the lowest level in housing starts since May 1998, when they were at 1.54 million.

The report comes as home builders--while optimistic about the prospects of home sales in the near term--have voiced concerns about rising interest rates and shortages of skilled construction workers and building materials, such as gypsum wallboard, insulation and, in some markets, bricks, said Michael Carliner, an economist with the National Assn. of Home Builders.