The FINANCIAL -- U.S. home building advanced in June, the latest sign of momentum in the housing market, according to Nasdaq.
U.S. housing starts rose 9.8% from a month earlier to a seasonally adjusted annual rate of 1.17 million in June, the Commerce Department said on July 17.
The gain was driven entirely by construction of multifamily housing units, including apartments and condominiums, which rose 29.4%. Meanwhile, starts on single-family units, which represents almost two-thirds of the market, dropped 0.9%.
New applications for building permits, a bellwether for construction in coming months, increased 7.4% to 1.34 million.
Economists surveyed by The Wall Street Journal had expected June housing starts to reach a rate of 1.11 million, and 1.16 million building permits to be issued.
Home-construction figures are volatile and often revised. Friday's report showed new-home construction fell 10.2% in May from the prior month, compared with an initially reported 11.1% drop. Starts in April rose 24.7%, an upward revision from a previously reported 22.1% increase.
Construction levels for new homes remain historically low, though there are signs of a healthy pickup in activity. Starts were 26.6% higher in June than a year ago, and permits were up 30%.
A forward-looking gauge of U.S. existing-home purchases rose to its highest level in more than nine years in May, the National Association of Realtors said last month. A separate report from the industry group showed sales of previously owned homes rose 5.1% in May, following a drop in April.
U.S. home builders also appear more optimistic this month. The National Association of Home Builders' confidence index rose to its highest level since November 2005, to a reading of 60 in July, the group said Thursday. A reading above 50 means most builders generally hold a favorable views of the market for newly built, single-family homes.
Friday's report showed most of the construction in June focused on large apartment buildings and condominiums. New construction of buildings with more than five units jumped 28.6%, hitting its highest level since 1987.
Federal Reserve Chairwoman Janet Yellen told lawmakers this week homebuilding "has picked up somewhat lately," but many borrowers still find it difficult to obtain a mortgage, which is crimping demand.
"Population growth is creating a need for more housing, whether to rent or to own, and I do expect that continuing job and wage gains will encourage more people to form new households," Ms. Yellen said. "Nevertheless, activity in the housing sector seems likely to improve only gradually."
Housing starts in the Northeast, which ground to a halt amid severe winter weather in the first quarter, rose to their highest level since June 2008. Housing starts also rose in the South, but fell in the West and Midwest.