This is the fastest pace of new-home construction since October 2008.
"This good report is in keeping with the results of our latest builder confidence survey, in which many of our members said that they are seeing an influx of more serious buyers to the new-homes market this summer," observed Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla.
"What's especially encouraging is that, as consumers realize the advantages of purchasing a newly built home while prices and interest rates are so favorable, builders are able to put more crews back to work on construction sites across the country," he explained. "This in turn is helping spur local economic growth, and policymakers need to be very careful to not take any steps that would derail the beginnings of such a positive trend at this crucial time."
Rising production is one more piece of evidence that housing is starting to take back its traditional role of leading the nation out of recession.
"It tracks with our forecast for continued improvement in new construction through the end of this year," said NAHB Chief Economist David Crowe.
"While many challenges continue to weigh down the housing recovery, including those related to builders' and buyers' access to credit, poor appraisals and the number of distressed properties in certain markets, production of single-family homes is now the strongest it has been since 2010 due to rising consumer demand brought on by improving market conditions," Crowe added.
Single-family housing starts rose for a fourth consecutive month to a seasonally adjusted annual rate of 539,000 units in June, their fastest pace since April 2010. Meanwhile, multifamily starts rose 12.8% to 221,000 units, in keeping with the solid pace of demand for rental units.
Regionally, combined single-and multi-family housing starts rose 22.2% in the Northeast and 36.9% in the West, but fell back 7.3% in the Midwest and 4.2% in the South in June. However, the declines were entirely due to monthly volatility on the multifamily side, as single-family starts posted gains across every region in June.
Issuance of new building permits, which can be an indicator of future building activity, fell 3.7% to a seasonally adjusted annual rate of 755,000 units in June following a large increase in the previous month. While single-family permitting posted a marginal, 0.6% gain to 493,000 units, multifamily permitting fell back 10.9% to 262,000 units from an above-trend pace in the previous month.
On a regional basis, permit issuance rose 2.9% in the West and held unchanged in the Northeast, but retreated 0.8% in the Midwest and 8% in the South in June.