Housing starts in the U.S. unexpectedly showed a notable decrease in the month of June, according to a report released by the Commerce Department on Wednesday.

The report showed that housing starts tumbled 9.9 percent to an annual rate of 836,000 in June from the revised May estimate of 928,000.

The steep drop came as a surprise to economists, who had expected housing starts to climb to an annual rate of 951,000 from the 914,000 originally reported for the previous month.

While the report may raise some concerns about the outlook for the housing market, Teunis Brosens, Senior Economist at ING Bank, said the data is not as bad as it looks.

Brosens noted that most of the weakness was in the always volatile multi-family housing starts, which plunged 26.2 percent to an annual rate of 245,000 in June from 332,000 in May.

Single-family housing starts showed a much more modest decrease, dipping by 0.8 percent to an annual rate of 591,000 in June from the revised May figure of 596,000.

“While single-family starts are somewhat lower than earlier this year, they are up 11.7% from a year ago, indicating that the trend is still positive,” Brosens said.

Meanwhile, the Commerce Department also said building permits fell 7.5 percent to an annual rate of 911,000 in June from the revised May rate of 985,000.

Building permits, an indicator of future housing demand, had been expected to rise to an annual rate of 990,000 from the 974,000 originally reported for May.

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