NEW YORK (CNNMoney) -- A recovery in home construction seems to be underway, with both housing starts and permits up in June year-over-year, according to a report released Wednesday by the Census Bureau.
Housing starts rose 6.9% over May to a 760,000 annual rate, the highest level since October 2008, and were up an impressive 23.6% compared with a year earlier. Starts of single-family homes inched up month-over-month.
Permits fell slightly from revised May numbers to 755,000, but were up 19.3% compared with June 2011.
Another industry release from the National Association of Home Builders (NAHB) reported that builder confidence is at its highest level in five years.
"Builder confidence increased by solid margins in every region of the country in July as views of current sales conditions, prospects for future sales and traffic of prospective buyers all improved," said Barry Rutenberg, NAHB's chairman and a home builder from Gainesville, Fla.
The biggest reason for optimism is a shoring up of home prices lately, according to NAHB's chief economist, David Crowe.
"Once home price increases start to kick in, buyers lose their fear of buying," he said.
Home prices rose in April for the first time in seven months, according to the S&P/Case-Shiller home price index.
Demand for homes has been strong in many markets, according to Glenn Kelman, founder of discount broker Redfin.
"Homebuyers are like a herd of hungry goats right now, going from hillside to hillside looking for something to eat," he said. "There's not enough inventory to go around."
He said many recent house hunters started out looking for existing homes in picture-perfect, move-in condition and were disappointed in what they found. Few of those homes are available because the owners are sitting on them.
Housing starts rose 6.9% over May to a 760,000 annual rate, the highest level since October 2008, and were up an impressive 23.6% compared with a year earlier. Starts of single-family homes inched up month-over-month.
Permits fell slightly from revised May numbers to 755,000, but were up 19.3% compared with June 2011.
Another industry release from the National Association of Home Builders (NAHB) reported that builder confidence is at its highest level in five years.
"Builder confidence increased by solid margins in every region of the country in July as views of current sales conditions, prospects for future sales and traffic of prospective buyers all improved," said Barry Rutenberg, NAHB's chairman and a home builder from Gainesville, Fla.
The biggest reason for optimism is a shoring up of home prices lately, according to NAHB's chief economist, David Crowe.
"Once home price increases start to kick in, buyers lose their fear of buying," he said.
Home prices rose in April for the first time in seven months, according to the S&P/Case-Shiller home price index.
Demand for homes has been strong in many markets, according to Glenn Kelman, founder of discount broker Redfin.
"Homebuyers are like a herd of hungry goats right now, going from hillside to hillside looking for something to eat," he said. "There's not enough inventory to go around."
He said many recent house hunters started out looking for existing homes in picture-perfect, move-in condition and were disappointed in what they found. Few of those homes are available because the owners are sitting on them.
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