US home construction climbed to a 6-month high in July

"Continued recovery in housing will be supported by historically low mortgage rates, coupled with a firming labor market that has begun to spur on wage gains for workers," said Neil Shankar, an economist at TD Bank.

Ian Shepherdson, chief economist at Pantheon Macroeconomics, expects permits to increase in response to the gains in housing starts.

Ground breakings for houses have shot up 10.6 percent year-to-date, while starts for apartment buildings have dipped after a torrid pace in recent years to accommodate an increase in renters.

Mortgage rates at historic lows and a strong job market have bolstered real estate this year.