Ground-breaking for new homes eased to a seasonally adjusted 1.672 million unit annual rate from an upwardly revised 1.735 million unit rate in May.
Analysts said the housing market was strong despite the decline in June, noting that the numbers were still at a historically high level.
Permits, an indication of future activity, rose 1.4 percent to a seasonally adjusted annual rate of 1.7 million.
Regionally, starts were mostly lower, falling by 7.6 percent in the South, 2.2 percent in the West and 0.9 percent in the Midwest.
Ground-breaking for new homes climbed 6.1 percent in the Northeast.