Both the number of building permits issued and housing starts rose in June, according to the Census Bureau.
One economist called the increase in new construction a small step toward alleviating the supply shortage in the housing market.
According to the Census Bureau, building permits in June 2017 reached a seasonally adjusted annual rate (SAAR) of 1,254,000, up 7.4 percent from the revised May rate, and up 5.1 percent from June 2016.
The Census Bureau reported that housing starts in June 2017 were at a SAAR of 1,215,000, up 8.3 percent from May 2016, and up 2.1 percent from June 2016.
“The pace of single-family housing starts, 849,000 (SAAR), is particularly important as it represents near-term new supply that the housing market is lacking,” First American Financial Corp. Chief Economist Mark Fleming said.
“The employment situation report, released earlier this month, reported a decline of 1,500 residential construction jobs between May and June. Building a home does not readily lend itself to outsourcing and automation. Home building still requires manual labor as a key input into the production process,” Fleming added.
Fleming said it’s hard to increase housing starts without increasing residential construction employment.
“This month’s decline and, more importantly, a lack of growth in residential construction jobs is a significant impediment to increasing the pace of housing starts,” Fleming said. “The reported increase in housing starts indicates that builders may be finding ways to increase building activity despite the impediment of negative residential construction job growth.”