New home construction in the United States rebounded in August from a July decline as the distressed housing market slowly continues to stabilise, government data shows.

Housing starts rose 2.3 per cent from July to an annual rate of 750,000, the Commerce Department said earlier this week.

The July rate was revised lower, to 733,000 from an initial estimate of 746,000.

The August pace in housing starts was a bit weaker than expected, with the consensus estimate at 770,000, but was 29.1 per cent above the August 2011 rate.

Starts on single-family homes, the largest segment of the US market, jumped 5.5 per cent.

New building permits, an indicator of potential future home building, were at an annual rate of 800,000, down 1.0 per cent from July, the Commerce Department said.

Permits were 24.5 per cent higher than a year ago.

“August starts and permit numbers were so-so but the broader trends suggest that the US housing recovery is solidifying,” said Robert Kavcic at BMO Capital Markets.

Optimism among home builders rose to its highest level in more than six years in September, the National Association of Home Builders said.

The NAHB/Wells Fargo sentiment index rose for a fifth straight month to its highest reading since June 2006.

“Builders across the country are expressing a more positive outlook on current sales conditions, future sales prospects and the amount of consumer traffic they are seeing through model homes than they have in more than five years,” said NAHB chief economist David Crowe.