Overall housing starts came in at the seasonally adjusted annual rate of 836,000, down 9.9% from May but up 10.4% from June a year ago.

The numbers disappointed. Housing starts, both single-family and multifamily, dropped in the second quarter, says IHS Global Insight economist Patrick Newport. What's more, multifamily permits are slowing.

Still, builders aren't putting up homes fast enough to satisfy buyers' demand, so prices should continue to rise and that'll attract more builders, Newport says.

While multifamily construction slowed in June, starts for apartment buildings and the like are still up 35% in the first half of this year vs. the same time last year, says Jed Kolko, economist for real estate website Trulia.

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