New residential construction in the U.S. showed a substantial rebound in the month of August, according to a report released by the Commerce Department on Wednesday.
The report said housing starts soared by 12.3 percent to an annual rate of 1.364 million in August after slumping by 1.5 percent to a revised rate of 1.215 million in July.
Economists had expected housing starts to surge up by 5 percent to a rate of 1.250 million from the 1.191 million originally reported for the previous month.
With the much bigger than expected increase, housing starts reached their highest level since hitting 1.448 million in June of 2007.
Multi-family starts led the way higher, skyrocketing by 32.8 percent to a rate of 445,000, while single-family starts jumped by 4.4 percent to a rate of 919,000.
The Commerce Department said building permits also spiked by 7.7 percent to an annual rate of 1.419 million in August after jumping by 6.9 percent to a revised rate of 1.317 million in July.
Building permits, an indicator of future housing demand, had been expected to drop by 2.7 percent to a rate of 1.300 million from the 1.336 million originally reported for the previous month.
The unexpected increase lifted building permits to their highest annual rate since reaching 1.493 million in May of 2007.
The report said single-family permits jumped by 4.5 percent to a rate of 866,000, while multi-family permits shot up by 13.3 percent to 553,000.
On Tuesday, the National Association of Home Builders released a separate report showing an unexpected improvement in U.S. homebuilder confidence in the month of September, reflecting low interest rates and solid demand.
The report said the NAHB/Wells Fargo Housing Market Index inched up to 68 in September from an upwardly revised August reading of 67.
Economists had expected the index to come in unchanged compared to the 66 originally reported for the previous month.
With the unexpected uptick, the housing market index reached its highest level since a matching reading in October of 2018.
The material has been provided by InstaForex Company – www.instaforex.com