The U.S. Commerce Department indicated on Friday that groundbreakings on new homes and new home building permits has risen in June in comparison to a year ago.
Housing starts, which are also known as groundbreakings, rose 26.6 percent while permits rose 30 percent. Both metrics reached eight-year highs, with rises reportedly attributed to the strength of multi-family housing, which, as the NY Daily News reported, placed apartment construction at its highest rate since November of 2007.
New construction in May, which was previously reported at 1.04 million, saw an upward revision to a rate of 1.07 million-units and housing starts, which rose nearly 10 percent, reached an adjusted annual rate of 1.17 million units.
Forbes noted in a report that Friday’s groundbreaking numbers fell within the range of expectations of economists surveyed by Bloomberg ahead of the official release.
New home sales in May were up 2 percent.
While Selma Hepp, chief economist for real estate website Trulia, has warned that Friday’s encouraging numbers are almost entirely the result of new multi-family buildings, she also told NY Daily News that “the tide has certainly turned in favor of optimism” in regards to demand for housing, which she attributed to the formation of households and job increases.
The tide has certainly turned in favor of optimism about demand for housing, fueled by job growth and household formation (…) While multifamily construction is reaching prerecession levels, we are still a long way behind with single-family construction (…) We’re back to prerecession levels in some components of the market but not all.
On the west coast, California’s jobless rate reportedly dropped to 6.3 percent in June after seeing a slight increase in May. The jobless rate reduction comes as a result of the state having added 22,900 non-farm payroll jobs in June. Just a year prior, the state’s jobless rate was at 7.5 percent.
In China, home prices rose for the second month in a row in June, an indicator that the country’s government led efforts to boost the struggling property sector have started to gain traction, Reuters reported via CNBC.
What are your thoughts on the recent housing market numbers?