WASHINGTON (AP) — U.S. builders started work in August on the most single-family homes in six months and requested permits to build even more in future months. The figures suggest housing remains a driver of economic growth despite higher mortgage rates.
Builders increased construction of single-family homes 7 percent last month to a seasonally adjusted annual rate of 628,000, the Commerce Department said Wednesday. That's the fastest rate since February. And they sought 627,000 permits for future single-family homes, 3 percent more than July and the best pace since May 2008.
Overall, builders broke ground last month on houses and apartments at an annual rate of 891,000. That's up from a rate of 883,000 the previous month. The gain in single-family homes was offset by a decline in volatile demand for apartments.
Total permits fell to a rate of 918,000 from 954,000 in July, also because of a decline in apartments.
The longer-term trend is also positive: housing starts are 19 percent higher than a year ago.
The housing market has been recovering steadily over the past year, helped by lower mortgage rates and steady job growth. The gains have contributed to economic growth at a time when consumers and businesses have spent more cautiously.
But mortgage rates have risen more than a full percentage point since early May. Some economists say higher rates may be starting to slow the recovery's momentum. In July, new-home sales plummeted to the lowest level in nine months.
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