The seasonally adjusted annual rate of 1.066 million starts was a strong gain over May's revised estimate of 977,000.

Housing starts are 26.9 percent below June 2007, when 1.458 million privately owned housing units were begun.

Building permits in June were up 11.6 percent above May's rate, but 23.9 percent below June 2007, the report said.

An estimated 1.091 million permits were issued in June, the report said. Completed housing projects also increaased to a seasonally adjusted annual rate of 1.167 million, up 1.2 percent above May's revised estimate of 1.153 million.

But, completions are 21.7 percent below the completion rate of June 2007, the report said.