The Commerce Department reported on Tuesday the housing starts rose by 1.9 percent m-o-m in September to a seasonally adjusted annual pace of 1.415 million, while building permits surged by 5.2 percent m-o-m to an annual rate of 1.553 million.

Economists had forecast housing starts increasing to a pace of 1.457 million units last month and building permits rising to a pace of 1.520 million units.

Data for August was revised to show homebuilding dropping to a pace of 1.388 million units, instead of decreasing at a rate of 1.416 million units as previously reported, and permits declining to a pace of 1.476 million units, instead of falling at a rate of 1.470 million units as previously reported.

According to the report, permits for single-family homes, the largest segment of the market, jumped 7.8 percent m-o-m in September, while approvals for the multi-family homes segment declined 0.9 percent m-o-m.

In the meantime, groundbreaking on single-family homes climbed 8.5 percent m-o-m in September, while housing starts for the multi-family plunged 14.7 percent m-o-m.