The Commerce Department reported on Monday the housing starts rose by 3.9 percent m-o-m in August to a seasonally adjusted annual pace of 1.615 million, while building permits surged by 6.0 percent m-o-m to a seasonally adjusted annual rate of 1.728 (the highest level since April).

Economists had forecast housing starts increasing to a pace of 1.555 million units last month and building permits decelerating to a pace of 1.600 million units.

Data for July was revised to show homebuilding increasing at a pace of 1.554 million units, instead of increasing at a rate of 1.534 million units as previously reported.

According to the report, permits for single-family homes, the largest segment of the market, went up 0.6 percent m-o-m in August, while approvals for the multi-family homes segment surged 15.8 percent m-o-m.

In the meantime, groundbreaking on single-family homes declined 2.8 percent m-o-m in August, while housing starts for the multi-family climbed 21.6 percent m-o-m.