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Housing Starts Up (And Whether That's A Good Thing)

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Housing starts, which quite literally means the number of houses and buildings that started construction (the figure is also an indication of construction jobs), jumped in May, according to Bloomberg, although that figure is still down 45 percent from a year earlier. "Construction of single-family homes rose 7.5 percent to a 401,000 rate, the third straight monthly gain. Work on multifamily homes, such as townhouses and apartment buildings, jumped 62 percent to an annual rate of 131,000." And new building permits, which indicate future construction, rose 4 percent. Additionally, the West saw a 29 percent jump in starts. Over at the Wall Street Journal blog, the news is being greeted tepidly. "The inventory of unsold new homes has been steadily declining in recent months but remains quite elevated compared with long run norms. Any near term pick-up in new construction will delay the normalization of inventory — especially since the recent jump in mortgage rates is likely to temper demand somewhat." [Bloomberg/WSJ]