Housing starts grew 6.5% in September at an annualized pace of 1.206 million, much more than expected.
Economists had estimated that housing starts grew 1.4% month-on-month at an annualized pace of 1.142 million, according to Bloomberg.
Building permits fell 5% at an annualized pace of 1.103 million.
They had forecast that building permits growth was 0%, at an annualized pace of 1.170 million.
In a client note, Pantheon Macroeconomics' Ian Shepherdson said the details were less exciting than the headline.
"Core single family starts and permits were both little changed, and the underlying trends seem to be leveling off, at least for now, having risen over the spring and summer," Shepherdson wrote. "The strength of the NAHB survey suggests we should expect renewed gains through the year-end, but we need to see mortgage demand stepping up before we can be confident of further sustained increases in housing construction next year."
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