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The U.S. Census Bureau and the Department of Housing and Urban Development reported this morning that new housing starts in July rose to an annual seasonally adjusted rate of 896,000, an increase of 5.9% from the upwardly revised May rate of 846,000 and a gain of 20.9% above the July 2012 rate of 741,000. The consensus estimate from a survey of economists expected a rate of around 900,000.

The seasonally adjusted rate of new building permits rose to 943,000, which is 2.7% above the upwardly revised June rate of 911,000 and 12.4% higher than the July 2012 rate of 839,000. The consensus estimate called for 935,000 new permits.

Single-family housing starts fell slightly to an annualized rate of 591,000 in June, down 0.8% from the downwardly revised May rate of 596,000.

Permits for new single-family homes fell 2.2% in July, to an adjusted annual rate of 591,000, from a downwardly revised total of 604,000 in June.

The increase in new housing starts also got a boost from a sharp rise in buildings with five or more units. In June, multiple unit construction fell to 231,000 starts from 311,000 in May. The July count is up 25.5% to 290,000. Multiple unit construction is notoriously volatile and July is no exception.

The National Association of Homebuilders (NAHB) on Thursday reported a three-point rise in builder confidence in August to 59, the highest reading for the index since January 2006.