WASHINGTON — U.S. builders started construction on homes in September at the fastest rate since July 2008, a further indication that the housing recovery is strengthening and could help the economy grow.

The Commerce Department said Wednesday that builders broke ground on single-family homes and apartments at a seasonally adjusted annual rate of 872,000 in September. That's an increase of 15 percent from the August level.

Single-family construction rose 11 percent. Apartment building increased 25.1 percent.

Applications for building permits, a sign of future construction, jumped nearly 12 percent to an annual rate of 894,000, also the highest since July 2008.

"If there was any doubt that the housing market was undergoing a recovery, even a modest one in the face of the terrible 2008 decline, those doubts should be erased by now," said Dan Greenhaus, chief global strategist at BTIG.

Construction activity is now 82.5 percent higher than the recession low hit in April 2009. Activity is still well below the roughly 1.5 million rate consistent with healthier markets. Still, the surge in construction suggests builders believe the housing rebound is durable.

"Today's data reinforce the view that while housing is not going to be the driver of economic activity that it was in the middle of the prior decade, neither will it be the anchor on activity that it has been in recent years," Greenhaus said.

Construction activity rose in three of the nation's four regions. The biggest increases came in the West and South. Housing starts increased by nearly 20 percent in both regions. Construction of new homes and apartments rose 6.7 percent in the Midwest. Housing starts fell 5.1 percent in the Northeast.

Builder confidence reached at a six-year high this month, according to a survey by the National Association of Home Builders. The group's index of builder sentiment rose to a reading of 41. While that's still below the level of 50 that signals a healthy market, it has steadily climbed over the past year from a reading of 17.

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Sales of new and previously owned homes have been slowly improving this year, and home prices are starting to show consistent gains.

Record-low mortgage have encouraged more people to buy. And the Federal Reserve's aggressive policies could push long-term interest rates even lower, making home-buying affordable for the foreseeable future.

Housing is expected to keep improving next year. But many economists say economic growth will stay muted until companies step up hiring and consumers start spending more.

Though new homes represent less than 20 percent of the housing sales market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to data from the home builders group.

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