US housing starts rose 2.3% in August

Associated Press

WASHINGTON

U.S. builders started work on more homes in August, driven by the fastest pace of single-family home construction in more than two years. The increase suggests the new-home market is gaining strength.

The Commerce Department says construction of homes and apartments rose 2.3 percent to a seasonally adjusted annual rate of 750,000 last month.

Single-family housing starts rose 5.5 percent to an annual rate of 535,000 homes, the best pace since April 2010. Apartment construction fell 4.9 percent. Applications for building permits fell 1 percent to an annual rate of 803,000, down from a four-year high in July.

The rate of construction and level of permits remain about half the pace considered healthy. But the steady gains suggest the housing recovery could endure.

Confidence among builders rose in September to the highest level in more than six years, according to a survey released Tuesday by the National Association of Home Builders/Wells Fargo. And builders are more confident that sales will improve over the next six months, the survey noted.

Sales of new and previously occupied homes are running ahead of last year. Home prices are increasing more consistently, in part because the supply of homes has shrunk and foreclosures have eased. And mortgage rates remain near record lows, a strong enticement for potential buyers with good credit.