The number of new-home starts in June was the highest since October 2008. While analysts say the US housing market is 'back on track,' there is still 'far to go.'
The pace of homebuilding activity is on the mend in another sign of healing in the US housing market.
Builder "starts" on new homes reached an annualized rate of 760,000 in June, the Commerce Department reported Wednesday. That's the highest level on that indicator since October 2008, when the nation's economy was being gripped by a severe financial crisis.
The gains in homebuilding don't mean the housing market has put all of its troubles behind it. Sales of so-called distressed properties remain high, and more than 1 in 5 mortgage borrowers owe more than their home is worth.
But real estate analysts say the progress is real.
Consider this: For four straight quarters, the residential construction industry has actually been adding to the nation's gross domestic product (GDP), as usually occurs during an economic recovery. The pace hasn't been as strong as normal, but it has accelerated. And such a four-quarter string of expansion in homebuilding hasn't been seen since 2005, according to Commerce Department data.
The annualized June housing starts, at 760,000, were up from 535,000 annualized in June 2011.