Finally. We may be looking at a sustainable recovery in the U.S. housing sector.
Housing starts in June increased 6.9% from May to a seasonally adjusted annual rate of 760,000, according to the Commerce Department this morning. Economists surveyed by Briefing.com had expected an increase to an annual rate of 743,000. Today’s data show a 23.6% increase from June 2011. New construction on single-family homes has now up for four straight months to a two-year high.
Building permits, which forecast future housing starts, dropped 3.7% in June from May to a seasonally adjusted annual rate of 755,000, but the drop came from a May that saw permit issuance (784,000 on seasonally adjusted annual rate) hit its highest level since September 2008. On a year-over-year basis June permits were up 19.3%.
This is extremely good news for the U.S. economy. Home building, although still at a very low level, is moving from a drag on U.S. economic growth to a contributor to GDP increases. (This couldn’t come at a better time for a U.S. economy struggling to shake off the effects of a deepening slowdown in Europe.) June was the tenth straight month to see an increase in the number of new homes under construction.
Investors will get their first peek at second quarter GDP on July 27. Economists have lowered their estimates for second quarter growth to well below the 1.9% growth in the first quarter on recent reports of slowing retail sales.
No related posts.