U.S. housing starts hit four-year high at 872,000 (by Jeffry Bartash)

WASHINGTON (MarketWatch) - Construction on new U.S. homes accelerated by 15% in September to an annual rate of 872,000, easily surpassing Wall Street estimates and marking the highest level in more than four years. And building permits, a sign of future demand, also shot up to a four-year high, rising 11.6% to an annual rate of 894,000, the Commerce Department said Wednesday. Permits for single-family homes, which account for about three-quarters of the housing market, rose 6.7% to an annual rate of 545,000 last month. Permits for multi-dwelling units, a more volatile category, rose three times faster. The latest report underscores the continued momentum in the U.S. housing market, which is gradually recovering from its worst slump in modern times. Economists surveyed by MarketWatch had expected starts to climb to an annual rate of 770,000 on a seasonally adjusted basis. Housing starts in August, meanwhile, were revised up to 758,000 from an original reading of 750,000, according to Commerce data. Permits in August were revised down slightly to an 801,000 annual rate. In September, housing starts rose in all regions except the Northeast, with construction almost equally strong in the West and South.