(Stock prices added.)
It appears as if the housing sector is beginning to heal, as home construction numbers unexpectedly jumped 3.6% in June, to their highest level in seven months, and building permits surged.
Housing starts increased to an adjusted 582,000 annual rate compared to the prior month, the Commerce Department said Friday. Economists actually expected no change to housing starts.
Bear in mind that this was all still 52% lower than the pace of construction last year. Regardless, the news sent shares of homebuilders up in morning trading. Toll Brothers (TOL) jumped 3% to $17.61, Pulte Homes (PHM) grew 3% to $9.27, Lennar (LEN) rose 3% to $9.87, KB Home (KBH) spiked 4.5% to $14.29 and Centex (CTX) increased 3% to $8.97.Building permits, a gauge of future activity, climbed 8.7% in June to an annual rate of 563,000 units. Economists forecast permits to rise by 1.9% to a rate of 528,000. Single-family starts in June surged 14.4% to 470,000, after rising 5.9% in May. It was the fourth climb in a row and the biggest increase since 17.6% in December 2004. The news follows yesterday's pick-up in the mood of homebuilders. The National Association of Home Builders said on Thursday that its housing market index rose two points to 17 in July, the highest level in nearly a year. Readings below 50 indicate negative sentiment about the market. The last time it was above 50 was April 2006.
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