Housing starts continue to gain steam, rising 3.6 percent in October to their highest rate since July 2008, the Commerce Department reports.

Housing starts have grown to about 40 percent of the 2.27 million peak reached in January 2006, Reuters reports.

Housing starts in October reached a seasonally adjusted annual rate of 894,000 units. Most of the increase last month in housing starts came from an 11.9 percent increase in starts for multifamily home, mostly attributed to an increase in demand for rental apartments. Meanwhile, groundbreaking for single-family homes mostly held steady in October at 594,000 units.

"This report is in line with our latest builder surveys, which show improving confidence and optimism in the marketplace as buyers take advantage of low mortgage rates and very attractive prices," says Barry Rutenberg, chairman of the National Association of Home Builders. "Builders are acting to meet rising demand while continuing to exercise caution by pulling a modest increase in the number of single family permits as the market continues to gradually gain its footing."

Regionally, housing starts rose the most with a 17.2 percent surge in the West, followed by an 8.9 percent increase in the Midwest. Housing starts decreased 6.5 percent in the Northeast, which was struck by megastorm Sandy in October, and a 2.5 percent decrease in the South.

Building permits, a future indicator of new home sales, dropped 2.7 percent in October, following an 11 percent increase last month.

Source: “Housing Starts Hit Highest in Four Years,” Reuters (Nov. 20, 2012) and the National Association of Home Builders