Dive Brief:

• A 12.8% increase in construction of single-family homes in July pushed overall housing starts for the month to their highest level since December 2007, the U.S. Commerce Department reported on Tuesday.

• Overall, new-home construction rose 0.2% between June and July to an annualized 1.21 million units, limited by a 17% drop in work on condominiums and apartments, the department said.

• At the same time, however, residential building permits fell 16.3% to an annualized rate of 1.12 million, the largest monthly drop since July 2008. That decline was more than economists had predicted and the first setback after three consecutive months of healthy increases. Permits for multifamily projects plummeted by 31.8%.

Dive Insight:

Single-family’s comeback after two months of declining starts followed an NAHB report on Monday showing that homebuilder confidence in the sector had reached a near-10-year high.

July multifamily starts were down after surging 29.4% in June and leading housing’s progress for the month. The June numbers, however, included a surge in permits in New York City, fueled by the expiration of tax incentives there.

Combined with steady gains in employment, retail sales and industrial output, July’s solid housing report indicates a strong start to the third quarter.