Single-family housing starts unexpectedly jumped 9.4% in June from the previous month with multifamily activity spiking 32%.
The Census Bureau reported Tuesday morning that single-family housing starts rose to a 453,000 seasonally adjusted annual rate in June from a 414,000 rate in May.
But compared to the same month a year ago, single-family starts are up just 0.4%.
The bureau also reported that multifamily starts hit 170,000 units in June -- the highest level since builders broke ground on 187,000 units back in January. (A bounce was expected because multifamily permitting was high in May.)
Tuesday's Census Bureau report shows multifamily permits rose 7% in June to a 217,000 annual rate while single-family permits rose by only 0.2% to a 407,000 rate.
"The shape of the housing recovery is starting to form," said Patrick Newport, an economist with IHS Global Insight. "It will be one in which the multifamily market recovers before the single-family market does.”
Newport notes that rents are rising along with multifamily property prices while vacancy rates are falling.
On the single-family front, the homeownership rate is declining. "For this segment to get back on track, two things must happen. The economy must continue creating jobs and house prices must bottom out," Newport said.