By Xavier Fontdegloria

Construction of new homes in the U.S. increased in September after declining the prior month, signaling continued strength in the housing market, data from the Commerce Department showed Tuesday. Here are the main takeaways from the report:

--Housing starts, a measure of U.S. homebuilding, increased by 1.9% in September compared with August, to a seasonally adjusted annual rate of 1.415 million. This is below The Wall Street Journal poll of economists, who expected starts to grow by 3.8%, to an annual pace of 1.47 million.

--The current level of starts is below the February's pre-pandemic annual rate of 1.57 million but 11.1% higher if compared with the same month a year earlier.

--In August, housing starts amounted to a downwardly revised 1.388 million from an earlier estimate of 1.416 million.

--Monthly housing starts data are volatile and are often revised. September's figures came with a margin of error of 8.8 percentage points.

--Residential permits, which can be a bellwether for future home construction, increased 5.2% in September to a seasonally adjusted annual rate of 1.553 million. The figure beats economists' forecasts of a 3.4% increase to an annual pace of 1.52 million.

--September's U.S. housing starts report is in line with the increase of the survey of the National Association of Homebuilders, which showed a rise of confidence in the single-family housing market. The index improved in October for a sixth straight month and hit a new record high in the 35-year history of the series, data showed.

Write to Xavier Fontdegloria at xavier.fontdegloria@wsj.com

(END) Dow Jones Newswires

October 20, 2020 08:53 ET (12:53 GMT)

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