Sept. 18 (UPI) -- New housing construction in the United States grew by 12 percent in August -- the strongest showing in more than a decade, the Commerce Department said Wednesday.
The government report shows about 1.4 million new home starts for the month -- the most since 2007.
The figures said building permits jumped 7.7 percent, a 12 percent increase over the same month last year, and housing completions rose 2.4 percent.
Experts say most of the new homes are built for buyers moving up in the housing market, where inventory on the low end is lean. Mortgage applications for new homes jumped 33 percent annually in August, the Mortgage Bankers Association reported.
"New home purchase activity was robust in August, as both mortgage applications and estimated home sales increased from a year ago," MBA's associate vice president of economic and industry forecasting Joel Kan told CNBC. "Recent increases in new residential housing permits and housing starts, lower mortgage rates, and a still-strong job market all bode well for the new home sales outlook."
While home buyers might proceed regardless of the interest rates, applications to refinance existing loans are down 4 percent for the week. Year-to-date, they're up 148 percent.
Demand for new mortgages was 67 percent higher this week than it was during the same period a year ago, the MBA said. The average interest rate for a 30-year fixed-rate mortgage was 4.01 percent, up from 3.82 percent -- and mortgage applications climbed 6 percent.