Housing Starts Rise an Unexpected 3.6%

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The New York Times http://www.nytimes.com/2009/07/18/business/economy/18econ.html?_r=1&hp By GERRY SHIH Published: July 17, 2009 Construction was started on more new homes in June than in any month since November, the Commerce Department said Friday, offering a signal that the housing market is improving despite a mixed outlook. Housing starts unexpectedly rose last month by 3.6 percent, to 582,000 units, a solid gain from 562,000 units in May and far more than the 532,000 figure that economists had forecast before the latest data’s release. The gains were concentrated in construction starts on single-family homes, which increased 14 percent for the biggest rise since December 2004. Housing permits in June, a measure of forward-looking builder confidence, posted an 8.7 percent increase, the largest gain in a year. Economists said such a bounce was overdue after housing starts in April reached their lowest level in 17 years. Throughout the economy, inventories of commodities, retail goods and now housing appear to be reaching minimal levels where demand may start to exceed supply. Some analysts said low mortgage rates during the spring and homebuyers tax credits introduced by the federal government played a role in fueling the demand for new housing. “New homebuyers have been helped into the market,” said Celia Chen, a housing economist at Moodys.com. “I think they’re building in advance of when that tax credit expires.” continued .....