The housing market might finally be coming around. The number of new homes that began construction last month took a surprise 3.6% leap to an 894,000 annual rate—the highest since July 2008, the Commerce Department announced today. That's well above the 840,000 economists surveyed by Bloomberg were expecting, though it's not all good news; building permits, a sign of future construction, fell.
"We're in a strong phase of the recovery," says a Toll Brothers exec. "It's a function of five years of pent-up demand being released," and "affordability and rising prices is also spurring people to buy." Almost all of the growth, however, was in multifamily homes, like townhouses and apartment buildings. Starts there shot up 11.9%, while single-family house construction actually fell 0.2%.