Construction At A Toll Brothers Development Ahead Of Housing Starts Figures
A worker builds a new Toll Brothers home. Photo by Bloomberg—Getty Images

Here’s why the real housing recovery is just getting started

Jul 17, 2015

The year of the construction boom just got even better for American homebuilders.

The Census Bureau and the Department of Housing and Urban Development announced Friday morning that builders launched new housing projects at a seasonally-adjusted annual rate of 1.17 million in June — that's up nearly 10% from May, and 27% from June 2014. The rate is also just shy of the eight-year high of 1.19 million set in April.

The numbers were driven by a big increase in multi-family construction, as housing starts of single-family homes actually shrank by 0.9% in June. As you can see in the chart below from Calculated Risk, the housing construction recovery has been dominated by the construction of apartment buildings, reflecting a shift in demand for urban over suburban housing, and the fact that the recession has made it difficult for many Americans to qualify for mortgages to buy a home.

StartsJune2015

But even if many Americans aren't able to buy homes, they still need somewhere to live. In the years following the real estate bubble, data suggested that Americans were increasingly doubling up, and living with friends and family rather than starting households of their own. Now that trend appears to be shifting, with more recent data showing stronger household formation that at any time since the housing crisis.

Although more data will be necessary before we can declare the housing construction slump officially over, 2015 is shaping up to be a great year for builders.

All products and services featured are based solely on editorial selection. FORTUNE may receive compensation for some links to products and services on this website.

Quotes delayed at least 15 minutes. Market data provided by Interactive Data. ETF and Mutual Fund data provided by Morningstar, Inc. Dow Jones Terms & Conditions: http://www.djindexes.com/mdsidx/html/tandc/indexestandcs.html. S&P Index data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Terms & Conditions. Powered and implemented by Interactive Data Managed Solutions