WASHINGTON - - Construction of new homes and apartments unexpectedly rose by 3.6 percent in June, the Commerce Department announced Friday morning, an indication that the recession-strained sector may be beginning to recover.

The department reported that the building of new homes and apartments had increased in a month to a seasonally adjusted rate of 582,000 units. That was slightly higher than what most economists had expected.

At the same time, permits to build new privately-owned housing units rose 8.7 percent in June - to 563,000 units - which was well above the expected 1.9-percent rise.

Regionally, the Midwest saw the greatest jump in home starts - up 33.3 percent from May, accompanied by a 3.4 percent increase in permits. The south experienced a slight decrease in home starts in June, but saw a 13.9 jump in permits - the greatest increase of any region.

"Given the differences across the regions, my guess is that most of this is attributable to recovery and not to changes in national tax policy" such as the $8,000 tax credit for first-time homebuyers, said Rebecca Blank, Under Secretary of Commerce for Economic Affairs.

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