WASHINGTON — U.S. home builders sharply increased construction in June, according to estimates released Tuesday by the Commerce Department.
Housing starts rose 14.6 percent to a seasonally adjusted annual rate of 629,000, the highest level since January, the data showed.
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Details underlying the June figures were also strong. There was a large increase in starts of multifamily units and a smaller gain in starts of single-family homes, the department reported.
Economists debated how seriously to take the increase.
“We are pleased but slightly baffled by this report,” said Ian Shepherdson, chief U.S. economist at High Frequency Economics.
Some welcomed the good news.
“We have been trying to call the bottom in the home construction sector for quite some time, and I think we finally have one,” said Joel Naroff, president of Naroff Economic Advisors.
Others were more cautious, doubting whether the increase was the start of a sustained increase in starts.
The report was much better than expected. Economists surveyed by MarketWatch had been looking for a 3.6 percent increase to 580,000. May’s starts, however, were revised lower to a 549,000 annual rate from 560,000.
Economists at Capital Economics in Toronto, who had forecast a big jump in June starts, said the gain was catch-up after unusually severe weather had prevented builders from breaking new ground.
In addition, reconstruction from deadly tornadoes and floods was going to get under way, they said.
“Housing starts may continue to creep gradually higher from their still-depressed levels. But the low rate of household formation, the high supply of existing homes and tough competition from foreclosed homes will mean that starts are unlikely to return to a normal level of around 1 million for another four years yet,” said Paul Dales, senior U.S. economist at Capital Economics, in a research note.
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