US housing had started rebounding in June & building permits have also surged to an almost 8-year high showing that the housing market is strengthening rapidly.
Groundbreaking rose by 9.8% to an annual start of 1.17 million units adjusted seasonally as per the Commerce Department announcement this Friday.
The starts for May were also revised upwards to 1.09 million units from the earlier reported 1.04 million units.
Economists that were polled by Reuters also forecasted that housing will go up to 1.11 million units in the previous month.
Rising formation of households combined with tightening labor markets is encouraging more and more young people to leave their parental homes and this is boosting the demand for housing in general and apartments in particular.
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.
A survey that was conducted on Thursday showed that builder’s confidence was at a higher than nine and a half year high this July which suggested that permits as well as groundbreaking had the scope to increase further. Economists also predict that housing is going to mitigate the economy’s drag which is being caused by struggling manufacturing.
Groundbreaking for homes with single families, the largest market share, fell by 0.9% to 685,000 units which reflected a large drop in the Northeastern region.
Single family home starts in the southern region, where most home building is known to take place, jumped to their highest level since March of 2008.
Starts for the multifamily segment increased by 29.4% to 489,000 units. Groundbreaking also increased to its highest ever level for buildings that have 5 or more units since November of 1987.
Permits for single family buildings went up by 0.9%.
