The U.S. Commerce Department reports housing starts jumped 4.8% in June, giving new hope to a real estate market hampered by extremely tight inventories.
The increase in groundbreaking means more new homes will be coming onto the market in the next few months, giving home buyers more properties to choose from. The number was slightly better than what economists had predicted.
The only damper on the optimism was a downward revision for May’s housing starts. Taken together it presents a picture of a lackluster new homes market with construction holding steady in the second quarter.
New home construction is still only running at half the level it was before the housing crash. Whether the industry was building too many homes then or not enough now is open for debate, but chances are the number best for the market is somewhere in the middle.
New construction starts on single-family homes rose 4.4% in June, at an annual rate of 778,000. Single-family construction makes up the lion’s share of new homes and activity was the most brisk in the South.
The increase, however, was largest in the Northeast, where groundbreaking on new single-family homes surged 31.6%. Increases were modest in the Midwest – 7.3% – and the West, at 3.1%.