The rate of new home construction in the US raced to its highest level in more than 12 years in August, against a backdrop of declining borrowing costs after the Federal Reserve cut interest rates for the first time since the financial crisis.

New housing starts jumped 12.3 per cent month-on-month to a seasonally-adjusted annual rate of 1.364m last month from an upwardly revised 1.215m (previously 1.191m), sailing past the median forecast from Wall Street for 1.3m.

It was the quickest rate for starts since June 2007. Permits to build new homes also leapt to their highest since that same date, to a rate of 1.419m in August from 1.317m in July and also comfortably above analysts’ predictions.

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