Housing construction, reflecting lower interest rates, rebounded 7.0% in June after falling for four straight months and reaching the lowest level in May since 1982, the government said today.
Fixed mortgage rates, which peaked at 11.22% in March before falling to 10.07% by the end of June, had been blamed for the recent decline in housing activity.
The Commerce Department reported that new homes and apartments in June were built at a seasonally adjusted annual rate of 1.40 million units, up from 1.31 million units in May when construction fell 2.5%.
June's increase was the highest since an 8.6% hike to 1.51 million units in February, 1988. It reflected a 28% increase in apartment construction, the highest since a 43% increase in April, 1988.
The housing industry had been among the sectors of the economy hardest hit as interest rates edged upward over the past year with the Federal Reserve seeking to restrain economic growth to contain inflation.
Construction of single-family homes fell 2.0% in June to an annual rate of 975,000 units, the lowest level since August, 1984, when 967,000 units were recorded. They fell 5.1% in May and 4.7% in April.