Housing Starts, Permits Show Unexpected Improvement

Driven by a dramatic rise inrnmulti-family construction, U.S. housing jumped unexpectedly to of an annualizedrnrate of 629,000 housing units in June. rnThis was an increase of 14.6 percent over May figures which werernadjusted down by 11,000 units to 549,000. rnThe +3.5 reported earlier as a May over April increase has now beenrnrevised to “unchanged.”    </p

According to figuresrnreleased Tuesday by the Census Bureau, multi-family starts increased by 30.4rnpercent in June to an annual rate of 176,000 units while single-family starts rosernto 453,000, a 9.4 percent increase over May. rnThe Census Bureau said that the June housing starts were the highestrnseen since January and single-family starts were the highest since lastrnNovember.</p

Economistsrnsurveyed by Reuters before the data was released had predicted that the Junernfigures would bring the rate to 575,000 units. rnWhile June 2011 figures were running 16.7 percent above the rate in Junern2010, housing starts still pale inrncomparison to the two million plus annual housing starts that were common duringrnthe peak years of the housing boom. </p

Other Census data released bodesrnwell for future construction.  Housingrnpermits were up 2.5 percent to a 624,000 rate. rnThis is on the heels of an 8.2 percent rise in May.  Economists had predicted that June’srnpermitting figures would come in at a much lower rate of 600,000.  Single family permits were at a rate ofrn407,000 only a fractional increase over the revised May figure of 406,000.  Permits for units in buildings of five orrnmore units rose substantial from a rate of 134,000 in May to 198,000.</p

The Commerce Department attributedrnthe rise in housing starts to a growing demand for rental apartments.  A press release from the Department said thatrnan overhang of existing homes has “left builders with little appetite to breakrnground on new projects and is frustrating the housing sector’s recovery.  But demand for rentals, as Americans shunrnhomeownership because of plummeting home prices, is stemming further declinesrnin the housing market.”</p

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