For example, permits issued in the past year for new homes in Phoenix were 85 percent higher than the year before, according to an estimate by Moody's Analytics. They were 76 percent higher in Miami. Nationwide, they rose 27 percent.
Cities that largely escaped the housing bust also are faring well. Permits have jumped 88 percent in Chicago, 53 percent in Minneapolis and 26 percent in San Diego. In these cities, construction has been so low for so long that normal population growth and demand for new homes have helped increase building.
In many cities that endured a boom and bust, developers are building in unfinished subdivisions, said Mark Vitner, an economist at Wells Fargo Securities. Land there is generally cheap. And builders can sell at prices low enough to compete with foreclosures.
Foreclosed homes, in turn, have become less attractive, Vitner noted. Most of the better properties have already been bought, many by investors. The ones left over are usually undesirable because they're far from city centers or in poor condition.
"It's like going to an after-Christmas sale after New Year's," Vitner said. "The best stuff is long gone."
Foreclosures are still ticking up nationwide, Chen said. But in some cities, such as Las Vegas, banks still face legal hurdles to foreclosing. That's keeping the overall supply of homes below demand and encouraging builders to step up construction.
Across the country, despite increased building, few new homes are available. There were only 145,000 new homes available in May — just above April's 144,000, which was the lowest on records dating to 1963.
Those trends are raising builders' confidence about the future. The National Association of Home Builders/Wells Fargo builder sentiment index this month jumped to its highest level since March 2007. The index is based on responses from 318 builders.
Builders also report higher turnouts by prospective buyers.
One such builder is McMillin Homes, which sells houses in Texas and California's Central Valley. It's ramped up construction this year.
Sales jumped 80 percent at McMillin's California communities in the first half of the year compared with the same period last year. And it plans to open five developments in Texas this year.
Customer traffic is up. And buyers are purchasing homes well before they're built. McMillin has also been able to raise prices.
"We see enough indicators that tell us we're coming off the bottom, finally," said Rey Ross, a senior vice president.
In its report Wednesday on home construction, the Commerce Department noted that the gains in single-family home building were broad-based: Housing starts rose in every U.S. region in June, led by the West.
"This was a good report," said Martin Schwerdtfeger, an economist at TD Bank.
The growth in construction permits "suggests that the momentum in building activity observed in recent months should carry forward," he said.
The housing market is improving even while the rest of the economy has weakened. Federal Reserve Chairman Ben Bernanke highlighted that gain in an otherwise gloomy report to Congress on Tuesday and Wednesday. Many economists say housing construction could contribute to overall economic growth this year for the first time since 2005.
As construction has increased, so have purchases. Sales of new homes rose in May to the fastest pace in more than two years. And while sales of previously occupied homes dipped in May, they were nearly 10 percent higher than a year earlier.
The economy is growing only modestly, and job creation has slowed sharply in the past three months. If those trends worsen, home building could slow in coming months.
Even Ross, the McMillin executive whose company is enjoying increased home sales, said those gains aren't enough to require hiring.
"We're not quite there yet," he said.