Nationwide housing production fell 9.3% to a seasonally adjusted annual rate of 893,000 units in June, according to newly released figures from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The drop was due primarily to a nearly 30% decline in the South. All other regions posted monthly gains.

"A modest 2.6% increase in single-family permits falls in line with the general optimism that we are hearing from our builders," said Kevin Kelly, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Wilmington, Del. 

Single-family housing starts were down 9% to a seasonally adjusted annual rate of 575,000 units in June, while multifamily production fell 9.9% to 318,000 units.

Regionally in June, combined single- and multifamily housing production rose in the Northeast, the Midwest and the West, with respective gains of 14.1%, 28.1% and 2.6%. Total production fell by 29.6% in the South, the nation's largest region.

"Take away the South and nationwide housing starts would have been in positive territory this month," said  David Crowe, NAHB chief economist. "This sharp regional decline could be due in part to lots and labor shortages, which are particularly acute in that part of the country. However, the general direction of housing production is trending upward, and we expect 2014 to be a positive year."

Issuance of building permits registered a 4.2% decline to a seasonally adjusted annual rate of 963,000 units in June. Multifamily permits dropped 14.9% to 332,000 units while single-family permits increased 2.6% to 631,000 units. 

The Northeast, South and West registered overall permit losses of 15.5% , 6.3% and 1.8% , respectively, while the Midwest posted a 6.6% gain. 

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