Housing Starts Hit Six-Month High As Permits Rise For Future Construction

WASHINGTON (Lucia Mutikani) - Housing starts rose more than expected in June to touch a six-month high and permits for future construction unexpectedly increased, a government report showed on Tuesday, likely reflecting growing demand for rental apartments.

The Commerce Department said housing starts increased 14.6 percent to a seasonally adjusted annual rate of 629,000 units, the highest level since January.

But May's starts were revised down to a 549,000 unit pace, which was previously reported as a 560,000 unit rate.

Economists polled by Reuters had forecast housing starts rising to a 575,000-unit rate. Compared to June last year, residential construction was up 16.7 percent.

Despite June increase, housing starts are less than a third of their peak during the housing boom.

An overhang of previously owned homes on the market has left builders with little appetite to break ground on new projects and is frustrating the housing sector's recovery two years after the end of the 2007-09 recession.

But demand for rentals, as Americans shun homeownership because of plummeting home prices, is stemming further declines in the housing market.

A survey on Monday showed sentiment among home builders edged up in July from a nine-month low in June, but they saw no increase in prospective buyers.

Last month, housing starts for multi-family homes soared 30.4 percent to a 176,000-unit rate, while single-family home construction -- which accounts for a large portion of the market -- increased 9.4 percent to a 453,000-unit pace.

New building permits rose 2.5 percent to a 624,000-unit pace last month. Economists had expected overall building permits in June to edge down to a 600,000-unit pace.

Permits were boosted by a 6.9 percent rise in the multi-family segment. Permits for the construction of buildings with five units and more increased 8.2 percent to their highest level since October 2008. Permits to build single-family homes edged up 0.2 percent.

New home completions fell 1.7 percent to 535,000 units in June.

(Editing by Neil Stempleman)

Copyright 2011 Thomson Reuters. Click for Restrictions.

Comments

[demilieu]

02:46 PM on 07/30/2011

Apartment construction.

[demilieu]

01:34 PM on 07/26/2011

Yes, it's apartments and not single family homes.

[Morgantheaxe]

11:41 PM on 07/19/2011

Shhhhhh don't tell the teapublicans!! They will start working to tank the housing market again!!!

[dadw5boys]

09:03 PM on 07/19/2011

Over a Million plus foreclosed excess housing setting with Banks and they are still building like the Housing Market bever collasped ?

Time to learn a new trade is my first thought.
Or time to tear down a lot of old homes but with all these Historic Distircts of homes built in the 1950's and 60's held as some kind of Trophy .

[Realtors Are Liars]

08:53 PM on 07/19/2011

Ha!!! BUILD BUILD BUILD!! MORE INVENTORY!!!! LOL

I say build even more so we can get these grossly inflated prices down to realistic levels.

[netexas121]

04:34 PM on 07/19/2011

I see the future.....lots and lots of loan defaults by greedy developers that can't manage money, live too lavish lifestyles and are doing this only to hide money in their pockets.

[gomezrules]

03:14 PM on 07/19/2011

I guess 'happy Days are here again'! That's what our govt is saying. And they haven't 'fudged anything when it comes to economic performance, have they now?

[weekendpartier]

03:02 PM on 07/19/2011

Dead cat bounce, as they say on Wall Street.

[mackbolan]

02:57 PM on 07/19/2011

i saw an article a couple of months ago about one florida town with 28,000 houses and 9000 of them are empty...this housing trouble is just starting....

[BonnieDoon]

01:53 PM on 07/19/2011

At least they'll have clear title.

Maybe that will be motivation for at least some folks to risk buying a home.

[iam99]

12:31 PM on 07/19/2011

Building new? Because millions of the previously owned homes now have a clouded title as a result of breaking the chain of title at secutitization AND robo-signing, AND faulty appraisals, would be my guess. So would they tear down all of the previously-owned and foreclosed homes with a clouded title?

[DR Dedo]

11:54 AM on 07/19/2011

More homes to lose to foreclosure.

[Downrivers]

11:36 AM on 07/19/2011

That's right...starts and the better barometer, permits both indicate a surge in units of 4 or more...single family detached is flat to down

Still...it translates to jobs

the full release is here.

http://www.census.gov/const/newresconst.pdf

[Terri Skau]

11:29 AM on 07/19/2011

If we could only pray away stupidity

[Miss Muffett]

11:08 AM on 07/19/2011

Why are we builing more houses?? This is ridiculous!! There are thousands upon thousands of vacant homes lining the streets in an already depressed real estate market and new homes are being built?

[Maranda MassieGuthrie]

11:22 AM on 07/19/2011

they are building multi family housing for the most part..it is rental properties, like apartments and condo's which i know for a fact we have a shortage of rentals here in mid Ohio, and landlords have the upper hand! Rent is going up big time, and the landlords have the pick of the litter! On the other hand the only homes not declining at record levels where I am at are new builds, and some not many want to reap the cheap price of a new build, and not loose all it's value like the others! Of course they can't sell them, so if they want a new build they better want to stick in it! But yep i will be happy when all these run down investment properties, that were rentals, and run down foreclosures get out off the market! they are dragging us down!

[vinyl1]

12:06 PM on 07/19/2011

Location. There is a housing shortage in Texas, Wyoming, and North Dakota. Empty houses in Florida and California are of no use to those who need to live in those states.

[netexas121]

04:35 PM on 07/19/2011

So dismantle those houses and recylce.