New home construction in US rises in June
According to official figures, construction of new US homes rebounded in June to its highest level in four months, a sign that homebuilders may finally be responding to soaring demand.
The June jump in construction pointed to a turnaround after several sombre reports in start of the year that had caused analysts to fear a shortage could soon price many new homebuyers out of the market.
The Commerce Department has stated that total housing starts rose 8.3% from May to June to a seasonally adjusted annual rate of 1.215m, putting the pace of construction up 2.1% above the same month last year.
Analysts had predicted a monthly increase of only 3.3%. A weak initial estimate for May was likewise revised upwards by 2.7%.
Permits to build new houses, an indicator of supply in the pipeline, likewise saw their biggest monthly increase in nearly two years, rising 7.4% to an annual rate of 1.254m.
June housing starts nearly doubled in the Northeast, soaring 83.7%, and continued to rise in the west, adding 10.6%.
Analysts say the current economic recovery has produced an exceedingly tight market, with a surge of demand following the Great Recession met by sluggish construction of new homes while many current homeowners are reluctant to sell.
