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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August's 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.
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.
JOSEPH TREVISANI, CHIEF MARKET STRATEGIST, WORLDWIDE
MARKETS, WOODCLIFF LAKE, NEW JERSEY:
"Housing starts and building permits were stronger in September but the sector has been marking time for the past six months at half its historic annual rates. When growth and employment return to the economy construction will pick up rapidly."
JOHN BRADY, MANAGING DIRECTOR AT R.J. O'BRIEN & ASSOCIATES
"Much stronger than expected, a very impressive number. Should be good for risk assets, but the focus is on last night's presidential debate."
(Americas Economics and Markets Desk)