Single-family housing starts unexpectedly jumped 14.4% in June from the previous month as construction activity in Midwest and Northeast broke out of the doldrums.
Builders in the Midwest and Northeast broke ground on 25% more houses in June than in May while construction activity fell off by 1.4% in the South and 14.8% in the West.
The U.S. Census Bureau reported that single-family housing starts jumped to a seasonally adjusted annual rate of 470,000 in June, up from a 411,000 rate in May. Despite the increase, single-family starts are down 28% from a year ago.
Weiss Research real estate analyst Mike Larson noted that the new homebuilders have "done a good job of reducing" their inventory. However, there is an oversupply of existing homes. "That means that any one hoping for a robust V-shaped recovery is likely to be disappointed," Larson said.
Patrick Newport of IHS Global Insight pointed out single-family starts are up four straight months. "The single-family housing starts recession ended in January," Newport said.