U.S. housing starts were up significantly in June with building permits surging to a near eight-year high, and apartment construction leading the activity.

Up 9.8 per cent from May to an annual pace of 1,174,000 units, multi-unit buildings were the driving force behind the surge.

According to the U.S. Department of Housing and Urban Development, starts for the multifamily segment increased in June by 29.4 per cent to 489,000 units. June permitting was up 30 per cent compared to a year ago when the estimate was 1.033 million.

All four regions of the U.S. posted permit gains for the month, with the Northeast up 2.8 per cent; the Midwest up 2.9 percent; the South up 10.4 percent and the West up 9.5 per cent.

Single-family starts in June were at a rate of 687,000—just 0.9 percent above the revised May figure of 681,000.

Building permits issued for home construction rose more than seven per cent to a 1.34 million-unit rate. Permitting for June reached a (seasonally adjusted, annual) rate of 1.343 million, the highest level for the nation since July 2007, when the (seasonally adjusted, annual) pace stood at 1.361 million.

Though multifamily data is an important factor in the number of starts, single-family homes are considered a more telling indicator of economic stability. The market has not seen a level that high since November 2005, a sign of a strengthening economy.