Washington, D.C. -- Nationwide total housing starts rose 10.5 percent to a seasonally adjusted annual rate of 598,000 units in August, bringing the pace of production more in line with the level of construction activity before the popular home buyer tax credit temporarily stimulated housing sales earlier this year, according to U.S. Commerce Department figures released today.

While most of the month's gain occurred on the multifamily side, single-family housing production, which increased 4.3 percent to 436,000 units, was still 9.1 percent below August 2009 as builders struggled to obtain finance and remained cautious about sustained demand.

"The vast majority of builders in this country operate small, single-family homebuilding firms and they are struggling to obtain acquisition, development and construction financing that will enable them to meet the current level of buyer demand and put more Americans back to work," said Bob Jones, chairman of the National Association of Home Builders (NAHB) and a home builder from Bloomfield Hills, Mich.

"The housing market has been in a holding pattern as the economy stalled in the second and third quarters. Construction activity returned to pre-home buyers tax credit levels in August as builders replaced sold single family homes and begin replenishing apartment building supply after a three year steady decline in multifamily construction," said NAHB Chief Economist David Crowe.

"Consumer uncertainty about the economy, the poor job market and the large number of foreclosed properties for sale continue to be a drag on housing. However, favorable home buying conditions should help spur additional demand as the job market gradually improves later this year," he added.

Most of the gain in housing production in August was due to a 32.2 percent jump to 160,000 units on the more volatile multifamily side.

Three regions registered improved starts activity in August, with the Midwest, South and West posting gains of 21.7 percent, 7.0 percent and 34.3 percent, respectively. The Northeast posted a 24.3 percent decline in starts this August.

Permit issuance, which can be an indicator of future building activity, rose 1.8 percent to a seasonally adjusted annual rate of 569,000 units in August. All of the gains were on the multifamily side, which rose 9.7 percent to 168,000 units.

Single-family permits fell 1.2 percent to 401,000 units. This was 6.7 percent below August 2009. Regionally, permits were up 19.0 percent in the West, remained flat in the Northeast and fell 5.3 percent in the Midwest and 2.5 percent in South in August.

Source: National Association of Home Builders