Good News? Housing Starts Up Significantly in June

• July 19th 2011

by Mark Wellborn

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Some good news on the housing front made national headlines today: the Commerce Department reported that housing starts in June jumped 14.6 percent over May to an annual rate of 629,000 units. (Housing starts represent the number of housing units that began construction in a given month.) The number marks a six-month high and was above what analysts were predicting.

Another figure released today, building permit authorizations, rose to reach an annual rate of 624,000 in June. Together, housing starts and building permits are looked to as leading indicators of the housing market’s direction.

Now for some words of caution.

While today’s numbers are a welcome reprieve from the gloomy national housing news of recent months, the surge in housing starts is being attributed to a 30 percent increase in multifamily homes (buildings with more than 5 units), which actually represent a relatively small piece of the overall housing market. (Although, single-family home starts were up 9 percent as well.) Analysts pointed to the multi-family data piece when trying to provide some perspective on what it means for the long-term.

“Most of the gains were in multi-family housing which always gives you pause as that is very volatile,” Bloomberg Economic Editor Michael McKee said on a video about the news. “The numbers are better than expected, but it is summertime, so we would hope to see a little bit of an increase in housing construction.”

The full report from the Commerce Department is available here.

This article originally published at http://dc.urbanturf.production.logicbrush.com/articles/blog/good_news_housing_starts_up_significantly_in_june/3822.