By Sarah Chaney and Likhitha Butchireddygari 
 

Home building in the U.S. increased in August to the highest level since June 2007, according to Commerce Department data released Wednesday. Here are key takeaways from the report:

--Housing starts, a measure of new-home construction, climbed 12.3% in August from the prior month to a seasonally adjusted annual rate of 1.364 million. This marked the strongest annual pace of home construction since June 2007, when starts logged in at an annual rate of 1.448 million. Economists surveyed by The Wall Street Journal had forecast that starts rose 4.1% to an annual pace of 1.24 million last month.

--Strength in multifamily building helped drive the August rise in home building. Construction of buildings with two or more units rose 32.8% in August from a month earlier.

--Residential building permits, which can signal how much construction is in the pipeline, rose 7.7% from July to an annual pace of 1.419 million.

--Housing-starts data are volatile from month to month and can be subject to large revisions. August's 12.3% increase for starts came with a margin of error of 10.2 percentage points. More broadly, home construction has been weak this year. In the first eight months of 2019, starts were down 1.8% compared with the same period in 2018.

--Wednesday's data are a positive sign for a housing sector that has been on shaky footing the past year. Despite historically low mortgage rates and rising wages, the housing sector has been strained by a low inventory of affordable homes propelled by rising construction costs and lack of land.

Write to Sarah Chaney at sarah.chaney@wsj.com

(END) Dow Jones Newswires

September 18, 2019 08:45 ET (12:45 GMT)

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