WASHINGTON — Housing starts surged 14.6% to a 629,000-unit seasonally adjusted annual rate in June, the Commerce Department reported Tuesday.
Starts were a revised 549,000 in May.
The June increase was the biggest monthly gain since a 20.9% jump in January.
Permits for new construction rose 2.5% to an annual rate of 624,000, from a revised 609,000 in May.
Economists polled by Thomson Reuters were looking for 580,000 starts and 600,000 permits.
Single-family starts, the more important and stable indicator of the housing market, were up 9.4% to an annual rate of 453,000 units, after a revised May rate of 414,000.
That was the biggest increase in single-family starts since an 18.1% climb in June 2009. Single-family permits were 407,000, up just 0.2% from May’s revised 406,000.
Bank of America Merrill Lynch economists said before the release that “although the inventory of new single-family homes for sale is incredibly lean, it is still too high for the current feeble sales pace.” The homebuilders’ sentiment index released Monday still showed a highly pessimistic attitude about their future business. Completed units dropped 1.7% to 535,000.
Multifamily housing starts in June were up 30.4% to a 176,000 rate, after a 2.2% drop to 135,000 in May.
There has been steadily growing demand for rental units that has pushed up multifamily starts, though the data is highly variable from month to month.