The U.S. Commerce Department reported today that August home construction surged 10.5 percent to a seasonally adjusted annual rate of 598,000 which is the highest level since April of this year.
Representing close to 73 percent of the home building market in August, single-family homes grew more than 4 percent, while the remaining 32 percent was from condominium and apartment construction.
Despite remaining 74 percent below their peak from January 2006, housing starts are up 25 percent from their bottom from April 2009.
As a result from high unemployment and a large amount of foreclosed homes on the market, builders are struggling with weak demand for new homes. Builders did benefit in the spring from the tax credits issued by the government however those expired in April.
Paul Dales, U.S. economist with Capital Economics, said "Homebuilding activity remains at an astoundingly weak level and construction has to be more than double current levels for the market to be considered healthy."
Used as a sign of future activity, building permit applications grew by nearly 2 percent to an annual rate of 569,000.
With home construction falling by 24 percent in the Northeast, construction activity rose 34 percent in the West while rising 22 percent in the Midwest and 7 percent in the South.