(Bloomberg) -- U.S. housing starts rose by more than expected in August, suggesting that the supply and labor constraints that have been holding back construction eased in the month.

Residential starts rose 3.9% last month to a 1.62 million annualized rate after an upwardly revised July print, according to government data released Tuesday. The median estimate in a Bloomberg survey called for a 1.55 million pace. 

Building permits, meanwhile, increased 6% in August, the biggest gain since January, reflecting a sizable jump in multi-family units. Permit applications for single-family homes also edged higher.

The data suggest that builders are making some construction headway despite limited availability of land, labor and materials, which has slowed residential starts from a 15-year high in March. Despite the bottlenecks, housing starts remain mostly above pre-pandemic levels, which is expected keep construction activity elevated for some time.

A measure of homebuilder sentiment out Monday rose in September for the first time in five months amid lower lumber prices and strong housing demand.

The number of single-family houses under construction but not yet completed, a measure of backlogs, rose to 702,000, the most since 2007, further underscoring builders’ struggle to keep up with demand.

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