Housing starts shot up 6.7 percent in July, the fourth straight monthly advance and the biggest in 16 months, as builders sought to meet buyer demand strengthened by lower mortgage rates.
But construction slipped 0.7 percent in the Midwest, to an annual rate of 279,000 homes, and was down 4.8 percent in the Northeast. Starts were up in the South and West.
The Commerce Department said that starts totaled 1.38 million at a seasonally adjusted annual rate, up from a revised 1.29 million in June. The June rate initially was estimated to be 1.26 million.
The July jump was the largest since builders began construction at a 14 percent annual rate in March 1994. The May rate was revised to a 1 percent gain, rather than a 0.4 percent loss. Starts had risen 2.5 percent in April following a 6.5 percent drop in March.
And applications for building permits, a barometer of future activity, suggested starts will continue to increase. They jumped 5.3 percent in July, to a 1.34 million rate, the fourth month without a loss and the largest advance since a 5 percent gain in December 1994.
Single-family starts, which are particularly sensitive to interest-rate changes, surged 6.8 percent in July after a 4.3 percent increase in June.
