July 19 (Reuters) – New U.S. home-building activity fell to a nine-month low in June and permits for new construction projects slipped as well, the latest indication of a cooling housing market as surging mortgage rates reduce affordability.

While multi-family construction gained ground as rising rents burnish the appeal of apartment projects, cushioning the overall decline, activity in the single-family segment dropped to a two-year low. Housing overall is set to have been a drag on U.S. gross domestic product in the second quarter.

Housing starts fell 2% to a seasonally adjusted annual rate of 1.559 million units last month, the lowest level since September 2021, the Commerce Department said on Tuesday. Data for May was revised higher to a rate of 1.591 million units from the previously reported 1.549 million units.

Economists polled by Reuters had forecast starts would come in at a rate of 1.580 million units. Permits for future homebuilding fell0.6% to a rate of 1.685 million units, also the lowest since September.

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