(Corrects month in fifth paragraph to May)
New U.S. housing starts and permits jumped in June, propelled by a rise in ground-breaking for single-family homes and suggesting the battered housing sector was beginning to stabilize, a government report showed on Friday.
Housing starts climbed 3.6 percent to seasonally adjusted annual rate of 582,000 units, from May's upwardly revised 562,000 units, the Commerce Department said. Single-family home starts jumped 14.4 percent, the biggest rise since December 2004.
Both overall starts and single-family starts have risen for two straight months. It was the first time since February-March 2007 that single-family starts posted two months of gains, and the first time since January-February 2008 for overall starts.
June permits to start construction, an indicator of builder confidence, leaped 8.7 percent to 563,000 units, the highest since December.
Analysts polled by Reuters were expecting starts and permits to be almost unchanged from May's 518,000 pace for permits and the previously reported 532,000 for starts.
U.S. stock index futures pared losses after the housing data, while U.S. government debt prices trimmed gains.
The housing starts rise is clear evidence of a rebound of demand for single-family homes, said Pierre Ellis an economist at Decision Economics in New York.
Starts hit a record low 479,000 in April. Compared to the same period a year ago, June starts were down 46 percent.
Permits were down 52 percent from a year earlier, the steepest year-over-year tumble since George H.W. Bush was president.
(Reporting by Mark Felsenthal and Ellen Freilich, Editing by Neil Stempleman)