Housing starts surge to fastest pace since 2008


Groundbreaking on new U.S. homes surged in September to its fastest pace in more than four years, a sign the housing sector's budding recovery is gaining traction.

The Commerce Department said on Wednesday housing starts increased 15 percent last month to a seasonally adjusted annual rate of 872,000 units. That was the quickest pace since July 2008, though data on housing starts is volatile and subject to substantial revisions.

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Augusts' starts were revised to show a 758,000-unit pace instead of the previously reported 750,000.

Economists polled by Reuters had forecast residential construction rising to a 770,000-unit rate.

The housing starts rate is now about 40 percent of its peak in January 2006. The housing market, the Achilles heel of the recovery from the 2007-09 recession, is slowly healing.

September groundbreaking for single-family homes, the largest segment of the market, rose 11 percent to a 603,000-unit pace - the highest level since August 2008. Starts for multi-family homes climbed 25.1 percent.

Building permits grew by 11.6 percent to a 894,000-unit pace in September. August's permits were unrevised at 801,000 units.

Economists had expected permits to rise to a 810,000-unit pace last month.

(Reporting by Jason Lange; Editing by Neil Stempleman)