Home building jumps 14.6% in June

Builders broke ground on more single-family homes and apartments in June, helping the battered construction industry gain a little life after a dismal spring. The Commerce Department said Tuesday that builders began work on a seasonally adjusted 629,000 homes last month, a 14.6 percent increase from May. Still, that's roughly half the 1.2 million homes per year that economists say must be built to sustain a healthy housing market. Jennifer Lee, a senior economist at BMO Capital Markets, called the gains "just a blip in the overall flat-lining trend of homebuilding activity." "We have to see a rebound in job creation to sustain a recovery in housing," she said. Much of the increase in June came from a surge in apartment construction, a volatile part of the industry. That sector jumped 31.8 percent last month. Single-family home construction rose 9.4 percent. It was the biggest increase since June 2009, when the recession ended. But analysts said the pace of 453,000 homes per year was still too depressed to signal a turnaround. "The underlying trend of single-family housing starts shows no signs of improving in a significant manner anytime soon," said Joshua Shapiro, chief U.S. economist at MFR Inc. Building permits, a gauge of future construction, increased 2.5 percent.

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