US homebuilding accelerated last month, according to government data Tuesday, as construction firms looked to feed the supply-starved real estate market.
Housing projects started last month rose 3.9 percent from July to more than 1.6 million, seasonally adjusted, the Commerce Department reported, which was above analysts' forecasts.
The United States is seeing a real estate boom as low borrowing rates and the upheavals of the Covid-19 pandemic push people to move, causing a supply shortage that has driven prices up and spurred homebuilding.
Multi-unit buildings saw a big increase as construction started rose 21.6 percent in August, but single-family home projects fell 2.8 percent, according to the data.
The fall in house construction is indicative that the real estate boom may be running out of steam, said Ian Shepherdson of Pantheon Macroeconomics, who predicted the indicator would cool soon.
"The flight to the burbs which triggered the boom in home sales, prices and construction activity is over, though mortgage demand has nudged back up in the past two months," he wrote in an analysis.
Construction differed wildly across the country. The Northeast rocketed 167.2 percent and the Midwest and South posted gains, while the West slumped 21.1 percent.
Permits, a volatile indicator of housing in the pipeline, climbed six percent last month to more than 1.7 million seasonally adjusted, according to the data.