US home construction is on the mend.
Permits to build new homes in June rose to their highest level in six months, up a better-than-expected 9 percent seasonally adjusted rise from May, the Commerce Department reported Friday. Actual housing starts in June rose 3.5 percent from May, posting their highest level since November 2008.
Most of the strength came in the construction of single-family homes. The market for condo and other multifamily construction remains depressed. While housing permits rose, multifamily housing starts fell back toward April's record low.
Although many analysts are now pointing to a recovery in single-family homebuilding, it's expected to be a slow one. Housing starts in June were still 28 percent below their annualized rate a year earlier and 74 percent below their peak in January 2006.
"The end [of the housing slump] may be in sight but, because of the inherent lags in the construction process, overall housing activity will continue to fall for at least another six months," wrote economist Paul Ashworth, of Capital Economics Ltd. in Toronto, in an analysis.