Published October 19, 2010 ReutersU.S. housing starts unexpectedly rose in September to a five-month high, but permits for future home construction fell on a sharp decline in approvals in the volatile multi-family segment , a government report showed on Tuesday.
The Commerce Department said housing starts rose 0.3% to a seasonally adjusted annual rate of 610,000 units, the highest level since April. August starts were revised up to a 608,000-unit pace from the previously reported rate of 598,000 units.
Analysts polled by Reuters had expected housing starts to slip to a 580,000-unit rate. Compared to September last year, housing starts were up 4.1%.
New building permits dropped 5.6% to a 539,000-unit pace last month after an unrevised 2.1% increase in August. Permits were dragged down by a 20.2% tumble in multi-family units. Permits for single-family homes rose 0.5% last month.
Analysts had expected overall building permits to rise to a 580,000-unit pace in September.
Though the housing market is starting to settle down after hefty declines following the expiration of a government tax credit for home buyers, an overhang of unsold homes is stifling recovery.
A survey on Monday showed sentiment among home builders edged up this month, but remained at depressed levels.
Groundbreaking last month was lifted by a 4.4% increase in single-family home construction. Starts for the volatile multi-family segment fell 9.7%.
