Housing starts rose more than expected in June to touch a six-month high, and permits for future construction unexpectedly increased, according to a government report released this morning, likely reflecting growing demand for rental apartments, Reuters reported.

The Commerce Department said housing starts increased 14.6 percent to a seasonally adjusted annual rate of 629,000 units, the highest level since January.

But May’s starts were revised down to a 549,000 unit pace, which was previously reported as a 560,000 unit rate.

Economists polled by Reuters had forecast housing starts rising to a 575,000-unit rate. Compared with June of last year, residential construction was up 16.7 percent.

Despite the June increase, housing starts are less than a third of their peak during the housing boom.