By Anna Louie Sussman and Eric Morath

WASHINGTON-Both housing starts and permits for new construction rose in October, a sign residential construction is ramping up to meet steady demand.

Housing starts rose 25.5% in October to an annual rate of 1.323 million, the Commerce Department said Thursday, as multi-family housing starts came back with a vengeance.

Single-family starts also continued to climb, reaching a rate of 869,000.

Starts in structures with five or more units, such as condos or apartment buildings, posted a 74.5% gain to hit a rate of 445,000 in October.

Building permits issued for privately owned housing units rose 0.3% in October from the prior month to a seasonally adjusted annual rate of 1.229million.

Permits for single-family homes, about 60% of all permits, rose 2.7% to a rate of 762,000.

Economists surveyed by The Wall Street Journal had expected overall October permits to fall to a 1.20 million annual rate and starts to rise to a 1.15 million pace. Construction typically begins a month or two after a permit is issued.

Monthly housing figures are often choppy and can be subject to large revisions. September permits were unrevised at 1.225 million. September starts were revised up slightly to 1.054 million from 1.047 million.

October's permits figure, based on a survey of local governments, had a margin of error of 2.0 percentage points. Last month's starts number, based on a survey of builders and home owners, came with a margin of error of 12.6 percentage points.

Through the first ten months of the year, permits wereup just 0.7% compared with the same period in 2015, reflecting a drop in permits for buildings withfive or more units that nearly erased gains for single-family permits.

Starts were up 5.9% through October, again led by gains in the single-family sector.

The U.S. agency's latest report on building permits and housing starts can be accessed at http://www.census.gov/construction/nrc/pdf/newresconst.pdf

Write to Anna Louie Sussman at anna.sussman@wsj.com and Eric Morath at eric.morath@wsj.com

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November 17, 2016 08:45 ET (13:45 GMT)

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