The department said building starts rose 0.9 percent above July's revised rate to a seasonally adjusted annual rate of 891,000.
From a year ago, housing starts are a more robust 19 percent higher.
Single-family housing starts rose 7 percent July to August. The annual rate for building starts with five housing units or more came to 252,000, the department said.
Permits for building projects dropped 3.8 percent below July's revised rate of 954,000 to a seasonally adjusted annual rate of 918,000.
Permits issued still came in 11 percent higher than August 2012, when 827,000 permits were issued.
Housing project completions in July came to a seasonally adjusted annual rate of 769,000, which is 0.3 percent above the revised June rate of 767,000 and 12.1 percent above August 2012, the department said in a release issued jointly with the Department of Housing and Urban Development.
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