U.S. Housing Starts Surge in September

WASHINGTON - U.S. housing starts jumped 3.4 percent in September and permits for future groundbreaking surged to a 32-year high, defying forecasts for a slowdown in construction following hurricanes Katrina and Rita, government data showed on Wednesday.

A separate report showed U.S. mortgage applications climbed last week for the first time in a month, even as interest rates on the 30-year home loan hit their highest levels of 2005, while the Federal Reserve said housing demand was cooling in some areas.

The Commerce Department said housing starts increased to a 2.108 million unit annual rate in September, as construction on both single-family and multifamily units rose. That outpaced August's upwardly revised 2.038 million unit rate, which was originally reported at 2.009 million units.

Economists had expected starts to slow to a 1.970 million unit annual pace, saying activity likely fell after the storms disrupted construction in the Gulf Coast region.

The Commerce Department said the hurricanes had a minimal impact on housing starts in September. After imputing data for August, it assumed no permits were issued for the about 24 jurisdictions that did not report September data for the department's sample survey.