For the month of June, the number of applications for building permits as well as the volume of US housing starts was at near record levels for the decade. According to a recent report from reuters.com, these two indicators show that the US housing market is strengthening at a high rate.
According to recent statistics from the Department of Commerce, the groundbreaking had increased by 9.8 percent or a seasonally adjusted volume of 1.17 million housing units. In comparison, May starts were revised to 1.07 million from the 1.04 million previously reported.
In another report, this time from cnbc.com, many analysts said that the increasing volume of households being formed as a result of a tightening in the labor market is the impetus for young adults to purchase their own homes, mainly apartments. This in turn boosts demand for housing as compared to a slight dip in groundbreaking for single family homes by 0.9 percent. The single housing market is the largest share in the housing market and now stands at a 685,000 units pace for the year.
The numbers bode well for the economy. According to a report from Bloomberg.com, Wells Fargo Co Chief Executive Officer John Stumpf said, during an earnings call held last July 14, "Housing activity has been especially encouraging with second quarter position for the best quarter for homes since 2007."
He added that the current employment opportunities and increased consumer confidence makes him 'optimistic that the economic expansion will sustain momentum into the second half of the year, and Wells Fargo should benefit from the increase in economic activity.'
Overall, the applications for permits for construction of apartments and other dwellings increased by 15.3 percent. This is lower than the 20 percent registered for May 2015. As for single family construction, the Northeast dropped by 27.3 percent while the West registered a decline of 7.1 percent.