Housing bonds turned a hefty 80% gain for the first half even as the entire municipal bond market was showing a 12% decline, Thomson Reuters data reported by The Bond Buyer show.
States issued $7.4 billion in housing bonds during the period, in 179 issues, compared to $4.2 billion through 134 issues in the first half of last year.
The sector showed a 16.9% gain for the month of June, according to the Thomson Reuters data.
Overall, the states issued $1.3 billion in housing bonds for June, up from $1.1 billion in the same period the year before. The number of issues increased from 30 in the June 2012 to 35 this year.
The housing bond market has benefited from a new structure which generally replicates the mortgage pass-through, the workhorse of the mortgage-backed securities sector.
Housing bonds represented about 5% of a total of $23.2 billion in municipal bonds done during June. That was a big 46% drop-off from the year before, when $43.4 billion were recorded.
Housing bonds are used by state HFAs (housing finance authorities) to buy down interest rates on mortgages for low income.
