New home construction surges

By Blake Ellis, staff reporterSeptember 21, 2010: 9:57 AM ET


NEW YORK (CNNMoney.com) -- New home construction surged to the highest level in four months in August, a government report showed Tuesday.

Housing starts, or the number of new homes being built, jumped 10.5% to a seasonally adjusted annual rate of 598,000 in August from a revised 541,000 in July, the Commerce Department said.

Economists were expecting a rate of 550,000 housing starts, according to a consensus estimate from Briefing.com.

The number of new homes being built in August was up 2.2% from a year ago.

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New homes by sector: New construction of single-family homes, the key sector of the housing market, rose 4.3% over the month to an annual rate of 438,000.

The annual rate for new construction of multi-family homes - buildings with 5 or more units - surged 32% to 147,000.

Because multi-family housing starts tend to fluctuate significantly month to month, the overall housing starts number for August may have been skewed by this spike in multi-family homes, said Smith.

"They're up a big amount for the month, but the number might be half that next month," he said. "Looking at the overall market, the single family number is the more applicable number."

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It might be only a one month's figures, it is up and shows at least some stabilization from the devastation of the last few years.