U.S. housing starts turned the corner in June, rebounding from a three month long slump. Ground was broken on new homes at the sharpest annual rate recorded over four months. Surely, Wednesday’s report on housing from the Department of Commerce will a long way toward restoring confidence in a sector that has had more than its fair share of troubles recently.

Fresh questions had risen about the health of the homebuilding industry after a particularly dismal report on homebuilder sentiment was released on Tuesday. But the housing starts report indicates that demand on the buyer side remains high at a time when homebuilder stocks are surging. Picking up homebuilding stocks continues to remain a lucrative option at this time.

June Rebound Ends 3-Month Decline

According to the Department of Commerce, housing starts increased by 8.3% from May to a seasonally adjusted rate of 1.22 million in June. This represents a 2.1% annual increase, the highest recorded in four months. June’s housing starts were also considerably higher than the estimated level of 1.16 million. The increase experienced last month comes after three straight monthly declines. Additionally, May’s housing starts figure of 1.09 million, originally the lowest recorded in eight months, was revised upward to 1.12 million.

Building permits also increased, by 7.4%, to a seasonally adjusted annual pace of 1.25 million. The forward looking metric also experienced a year-over-year increase of 5.1%, implying that housing activity is likely to remain strong in the near future. Meanwhile, single family starts increased by 6.3%, indicating that homebuilding companies were prioritizing homes built for sale over those intended for rentals.

Construction of multifamily homes, which includes apartment buildings and townhouses, increased by 13.3%. This substantial increase represents a strong rebound after five consecutive months of declines. Additionally, housing starts experienced increases over three of the four geographical regions surveyed. This includes a 22% jump in the Midwest. Meanwhile, housing completions increased by 5.2% to the highest level witnessed since Nov 2016.