U.S. home construction rose a solid 1.9% in September after having fallen in the previous month, as home building continues as one of the bright spots of the economy.

The increase last month pushed home construction to a seasonally adjusted annual rate of 1.42 million homes and apartments after a 6.7% drop in August, the Commerce Department reported Tuesday.

Applications for building permits, a good barometer of future activity, rose an even stronger 5.2% to 1.55 million units.

After a plunge in the spring due to pandemic-related lockdowns, housing has staged a solid rebound as demand for homes with more space has grown and mortgage-rates have stayed at ultra-low levels.

Construction of single-family homes in September surged by 7.8%, offsetting a 14.7% drop in the smaller apartment sector. Single-family construction is now at its highest level since 2007.

Construction was up in every region of the country except the Midwest which registered a 32.7% plunge. Construction surged 66.7% in the Northeast with smaller gains of 6.2% in the South and 1.4% in the West.

Economists believe home building will continue to thrive in the months ahead.

“Strong demand, low inventory and a record level of homebuilder confidence continue to support new home construction,” wrote Nancy Vanden Houten of Oxford Economics.

The National Association of Homebuilders reported Monday that its survey of builder confidence climbed to a new record high of 85 in October, up from a September reading of 83.

(AP)