Housing starts in August jumped 10.5% in August to a seasonally adjusted annual rate of 598,000, with much of the growth coming via a 42.5% rise in multifamily construction largely in the West, the Commerce Department reported Tuesday.

Single-family starts were up 4.3% from July, still 9.1% below August, 2009.Overall, starts were 2.2% ahead of the same month last year.

Permits in August rose were up 1.8%, driven by an 11.9% increase in multifamily housing., to a seasonally adjusted annual rate of 569,000, still 6.7% below August 2009. Single-family permits were down 1.2% from July at a rate of 401,000, 16.8% below August, 2009.

Regionally, the Northeast acted as a drag on starts in the rest of the nation. Starts were down 24.3% in the Northeast, with single family down 28.0%; up 21.7% and 18.9%, respectively, in the Midwest; up 7.0% and 0.5% in the South and up 34.3% and 22.7% in the West. Year-over-year, the Northeast was down 21.1% overall and down 21.7% for single family; the Midwest was up 5.7% and 2.3%, respectively; the South was up 2.8% overall but down 6.3% for single-family and the West was likewise up 11% overall but down 18.6% for single-family.

In August permits, the Northeas was flat overall and down 4.5% in single-family; the Midwest down 5.3% and 1.4%, respectively; the South down 2.5% and flat; and the West up 19.0% and down 2.4%. Year-over-year, the Northeast was down 4.3% overall and and down 10.6% for single-family; the Midwest was down 15.2% and 21.8%, respectively; the South was down 11.8% and 16.1%; and the West was up 12.2% but down 17.2% for single-family.

Wall Street, expecting starts to come in at 550,000, was surprised by the data and most of the public builder group was trading up by midmorning Tuesday. Michael Rehaut at J.P. Morgan put out a note stating, "Overall, we view these data points as consistent with recent builder commentary as well as our conversations with industry participants, pointing to a stable to slightly improving housing market."