US housing starts rise more than expected in June

US housing starts rose more than expected in June, according to data released by the Commerce Department on Wednesday.

Housing starts were up 8.3% to a seasonally-adjusted annual rate of 1.22m from May's upwardly-revised 1.12m and 2.1% higher than June 2016. They also came in ahead of expectations for an increase to 1.16m.

Meanwhile, single-family housing starts were up 6.3% from May's revised figure to a seasonally-adjusted rate of 849,000. Permits for new construction rose 7.4% from May's revised rate of 1.17m to 1.25m, beating expectations of 1.20m.

Pantheon Macroeconomics said: "The May numbers always looked too weak, so a decent rebound in June was in the cards. In the starts data, single-family rose 50K, with multi-family up 43K; for permits, single-family rose 34K, with multi-family up 54K, a 13.9% leap, but these data are very volatile. The trend in single-family permits has dipped this year, having previously overshot the pace implied by the level of new home sales.

"We expect sales to rise sharply over the summer, so fall construction activity should pick up, but the nervousness apparent in recent NAHB surveys, triggered partly by soaring materials costs, makes us hesitate before forecasting a sustained increase in starts and permits."