U.S. homebuilding rebounded more than expected in June after declining for three straight months, but construction activity remains constrained by rising lumber prices and labor and land shortages.
Housing starts jumped 8.3 percent to a seasonally adjusted annual rate of 1.22 million units, the highest level since February, as both single-family and multi-family construction increased, the Commerce Department said on Wednesday.
May's sales pace was revised up to 1.12 million units from the previously reported 1.09 million units.
Economists polled by Reuters had forecast groundbreaking activity rising to a rate of 1.16 million units last month. Homebuilding rose 2.1 percent on a year-on-year basis.
Despite the bounceback, homebuilding has lost momentum after strong gains in both the fourth and first quarters. Economists blame the slowdown on supply bottlenecks.
A survey on Tuesday showed confidence among homebuilders hit an eight-month low in July amid complaints about high lumber prices and shortages of building lots and labor. Lumber prices have surged after the government in April imposed anti-subsidy duties on imports of Canadian softwood lumber.
The dollar was trading slightly higher against a basket of currencies, while prices for U.S. government bonds fell.