U.S. builders started construction on homes in September at the fastest rate since July 2008, a further indication that the housing recovery is strengthening and could help the economy grow.
The Commerce Department said builders broke ground on single-family homes and apartments at a seasonally adjusted annual rate of 872,000 in September. That's an increase of 15 per cent from the August level.
Single-family construction rose 11 per cent. Apartment building increased 25.1 per cent.
Applications for building permits, a sign of future construction, jumped nearly 12 per cent to an annual rate of 894,000, also the highest since July 2008.
"If there was any doubt the housing market was undergoing a recovery, even a modest one in the face of the terrible 2008 decline, those doubts should be erased by now," said Dan Green-haus, global strategist at BTIG.
Construction activity is now 82.5 per cent higher than the recession low hit in April 2009. Activity is still well below the roughly 1.5 million rate consistent with healthier markets. Still, the surge in construction suggests builders believe the housing rebound is durable.
"Today's data reinforce the view that while housing is not going to be the driver of economic activity that it was in the middle of the prior decade, neither will it be the anchor on activity that it has been in recent years," Greenhaus said.
Construction activity rose in three of the nation's four regions. The biggest increases came in the West and South. Housing starts increased by nearly 20 per cent in both regions. Construction of new homes and apartments rose 6.7 per cent in the Midwest. Housing fell 5.1 per cent in the Northeast.
