Here come housing starts

(ShareCast News) – Housing starts in the United States jumped in June, alongside a strong gain in permits.

New construction was up 9.8 per cent from May to an annual pace of 1,174,000 units, with the greatest strength in multiple unit buildings, the department said on Friday.

A survey on Thursday showed builders’ confidence held at a more than 9-1/2-year high in July, suggesting that both permits and groundbreaking have scope to rise further.

Privately-owned housing completions in June were at a seasonally adjusted annual rate of 972,000, which is 6.7 percent below the revised May estimate of 1,042,000 but is 22 percent above the June 2014 rate of 797,000. Permits for buildings with five units or more increased to their highest level since January 1990.

In June, housing starts increased a strong 9.8 % versus May’s jump and were 26.6% higher than June 2014 reading.

The permits for future constructions of homes have also gone up by 7.4% to 1.34 million units which is the highest it’s been at since July 2007. Starts for single-family houses fell almost 1% in June. Yet single-family authorizations in June were at a rate of 687,000, a miniscule 0.9 percent above the revised May figure of 681,000. Some economists argue that the housing market will offset the drag on the economy from a struggling manufacturing sector and high trade deficits. The market has not seen a level that high since November 2005.

The housing market is building momentum. Still, Trulia’s chief economist Selma Hepp says there is evidence that the apartment demand may be peaking: “The Architecture Billings Index for multifamily residential projects continued to fall for four consecutive months”, Hepp says.