In another signal that the U.S. housing market is on track to recovery, new home starts soared 15% last month. The Commerce Department announced on Wednesday that housing starts rose to a 872,000 annual rate in September.
That beat the annual rate of 770,000 expected by economists and marked highest level for housing starts in more than four years, Bloomberg noted.
Housing starts rose by 34.8% over last year, the largest annual increase since April. Building permits rose sharply as well, hitting an annual rate of 894,000. That was the highest rate since July 2008 and beat economists’ forecasts of an annual rate of 810,000.
The government also revised higher its estimate of housing starts for August from an annual rate of 750,000 as first reported to 758,000 instead.
Economists said September’s new home construction data indicated that the housing market had turned a corner and that a rising homebuilding industry would eventually help lower unemployment.
The good news boosted homebuilder stocks. Shares of D.R. Horton (NYSE:DHI) and Toll Brothers (NYSE:TOL) both moved up more than 1% in Wednesday morning trading, while shares of Ryland Group (NYSE:RYL) climbed almost 3%.