Recovery Hinted as Building Permits Climb for 2nd Month

California’s home-building slump is showing faint signs of a recovery.

The California Building Industry Assn. reports that permits to build new homes, a key indicator of future construction activity, rose nearly 1% in June. It was the second month in a row that permits rose, a sharp contrast to the monthly declines in most of the previous 12 months.

Permits were taken out at an annualized pace of 117,400 units in June. An increase in the number of permits to build single-family homes offset a mild drop in permits for apartments.

Robert Rivinius, the trade group’s chief executive, said lower mortgage rates could spur even more construction in the months ahead.

However, he said, a sluggish economy and the difficulty that builders face when lining up financing for new projects “continue to hamper a full-blown housing-production recovery.”