Link to source

Home construction surged in June, adding to evidence the housing market is gradually beginning to recover, the Commerce Department said Friday. But a separate report show rising unemployment threatens to hinder a strong rebound in the economy.

Construction of new homes rose in June by 3.6% from the prior month to a seasonally adjusted annual rate of 582,000. It was the third consecutive monthly gain, leaving the level of new home construction at its highest since November, although the pace remains well below the 1.1 million rate seen a year ago, in June 2008.

The overall gain was driven by a 14.4% jump in construction of single-family homes — the biggest monthly gain in four years and the fourth consecutive improvement this year, bringing the pace of new single-family home construction to 470,000 units at an annual rate. The gain offset a decline in construction of multifamily homes.

The report echoed news Thursday that home-builder confidence continues to recover, as an index of sentiment rose to 17 in July, its highest since September, from 15 in June. Later this month, reports on June home sales will show whether increased buying activity is behind the surge in home construction — or whether these new units will add to already bloated inventories and weigh further on prices.

One key barrier to a recovery in the housing market — and the economy overall — is the rising unemployment rate, leaving fewer workers in a position to buy a house. The U.S. unemployment rate rose to a seasonally adjusted 9.5% in June as the total number of jobs lost in this recession, which began in December 2007, hit 6.5 million.

Michigan has the nation’s highest unemployment rate, 15.2% as of June, according to a separate Labor Department report on state unemployment released Friday. It’s the first time since 1984 that a state has recorded a jobless rate above 15%, Labor noted. The next highest are Rhode Island at 12.4%, Oregon at 12.2%, South Carolina at 12.1% and Nevada at 12%.

North Dakota, by comparison, has the lowest unemployment rate in the U.S., just 4.2%, while Nebraska is next at 5% followed by South Dakota at 5.1%, Utah at 5.7%, and Wyoming at 5.9%.

Link to source

Comments

Leave a Reply