Home Building Up; Jobless Claims Fall

Housing construction in June climbed to the highest level since the beginning of the year and fewer American workers filed claims for unemployment benefits, more signs that the economy may be gaining traction.

The Commerce Department reported Thursday that the number of housing projects builders broke ground on rose 3.7% in June from May to a seasonally adjusted annual rate of 1.8 million units, the strongest showing since January.

The increase came despite wet weather in some parts of the country and after a sizable 6.8% advance in May.

In another report, the Labor Department said that for the week ended Saturday, new applications for jobless benefits fell by a seasonally adjusted 29,000 to 412,000, a three-week low.

Although economists said the weekly figure could be distorted by temporary plant closures that occur around this time each year, they felt heartened by a solid drop in the more stable, four-week moving average of claims, which smooths out weekly fluctuations.

The moving average fell by 3,500 last week to 424,000, the lowest level in three months.

The number of workers collecting unemployment benefits for more than a week plunged by 117,000 to 3.65 million for the week ended July 5, the most recent period for which that information was available and the lowest level since late April.

In the housing construction report, the number of single-family homes that builders began in June rose by 5.3% from May to an annual rate of 1.46 million units. However, the number of apartments, condos and other multifamily housing projects dropped by 4.3% in June to an annual rate of 312,000.

Home builders are bullish about sales even as mortgage rates creep up -- the average rate on a 30-year fixed-rate mortgage rose this week to 5.67% from 5.52% last week, mortgage giant Freddie Mac reported.