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, official figures showed Wednesday.
The June jump in construction pointed to a turnaround after several somber reports in start of the year that had caused analysts to fear a shortage could soon price many new homebuyers out of the market.
Total housing starts rose 8.3 percent from May to June to a seasonally adjusted annual rate of 1.215 million, putting the pace of construction up 2.1 percent above the same month last year, according to the Commerce Department. Analysts had predicted a monthly increase of only 3.3 percent.
A weak initial estimate for May was likewise revised upwards by 2.7 percent.
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 percent to an annual rate of 1.254 million.
June housing starts nearly doubled in the Northeast, soaring 83.7 percent, and continued to rise in the west, adding 10.6 percent.
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.
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