Residential Construction Shows Signs of a Bottom

Spending on U.S. construction projects unexpectedly rose in June, led by an improvement in residential real estate and gains in government projects.

Residential construction is showing signs of bottoming. Housing starts unexpectedly rose in June as construction of single-family dwellings jumped by the most since 2004, Commerce figures last month showed. The 3.6 percent increase brought starts to the highest level in seven months.

Even so, mounting foreclosures and unemployment are likely to restrain home purchases for an extended period. The economy lost 467,000 jobs in June, bringing the total since the recession began in December 2007 to 6.5 million. Builders cut 79,000 jobs that month.

Foreclosure filings reached a record in the first half of the year, providing competition for homebuilders and pushing down the value of all houses.