US housing starts rise to 7-month high
The Commerce Department has today revealed that US housing starts and permits rose higher than expected in June.
According to official figures, new housing starts rose 3.6% to 582,000 units – the highest level in seven months. This is the second month in a row that housing starts have risen following record lows in April.
However, the Commerce Department did point out that June housing starts are down 46% when compared with the same month last year.
Meanwhile, single family home starts soared 14.4% – a high not seen since December 2004. Activity for single family homes has now gained for four consecutive months.
In addition, applications for building permits, a barometer of future home construction, rose 8.7% to 563,000 units – the highest level since December last year.
However, William O’Donnell, head treasury strategist at RBS Securities, expressed caution and commented: “This is another piece of data for those seeing the recession ending soon. But housing starts are still within the range of the past six months and the completion rate is still down.”
In related news, the Federal Reserve said earlier this week that the US economy, which is the world’s largest, is looking towards a recovery in the latter half of the year, which, according to the Federal Reserve, may lead to cut in its financial stimulus plan.
In other news this week, the Commerce Department reported a rise in US retail sales in June of 0.6% and follows on from the increase of 0.5% in May. Analysts had forecast a rise of 0.4% for the month.