Partly reflecting a rebound in new residential construction in the Northeast, the Commerce Department released a report on Tuesday showing that U.S. housing starts increased by much more than anticipated in the month of June.
The Commerce Department said housing starts jumped 4.8 percent to an annual rate of 1.189 million in June from the revised May estimate of 1.135 million.
Economists had expected housing starts to edge up by 0.5 percent to a rate of 1.170 million from the 1.164 million originally reported for the previous month.
The rebound in the Northeast contributed to the stronger than expected growth, as housing starts in the region surged up 46.3 percent to a rate of 117,000 in June after tumbling 32.8 percent to a rate of 80 in May.
Housing starts in the West also spiked by 17.4 percent to a rate of 317,000, while starts in the South fell by 3.4 percent to 571,000 and starts in the Midwest slid by 5.2 percent to 184,000.
The report also showed that single-family housing starts climbed by 4.4 percent to a rate of 778,000, and multi-family starts rose by 5.4 percent to a rate of 411,000.
Additionally, the Commerce Department said building permits, an indicator of future housing demand, climbed by 1.5 percent to an annual rate of 1.153 million in June from a revised 1.136 million in May.
The consensus estimate had called for building permits to rise to a rate of 1.150 million from the 1.138 million originally reported for May.
Building permits in the Northeast jumped by 9.4 percent to a rate of 105,000, and permits in the South surged up by 8.3 percent to a rate of 590,000.
On the other hand, the report said building permits in the West slumped by 10.1 percent to a rate of 286,000, while permits in the Midwest dropped by 2.8 percent to 172,000.
Single-family permits rose by 1.0 percent to a rate of 738,000, and multi-family permits climbed by 2.5 percent to a rate of 415,000.
Compared to the same month a year ago, housing starts were up by 4.8 percent in June, while building permits were up by 1.5 percent.
On Monday, the National Association of Home Builders released a separate report showing an unexpected drop in homebuilder confidence in the month of July.
The report said the NAHB/Wells Fargo Housing Market Index edged down by a point to 59 in July after climbing by two points to 60 in June. Economists had expected the index to inch up to 61.
Looking ahead, the National Association of Realtors is scheduled to release its report on existing home sales in the month of June on Thursday.
by RTT Staff Writer
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