Apartment construction in July hit a 25-year high, fueling the month’s pickup in housing while single-family home construction increased modestly. U.S. home construction, typically volatile month to month, increased 15.7 percent last month, the fastest pace since November after declines of 4 percent in June and 7.4 percent in May, the Commerce Department said Tuesday.

And while single-family building permits increased just 0.8 percent in July versus the year-earlier period, apartment permits increased 17.5 percent over the same period, according to Commerce Department data.

The surge in apartment construction fuels less economic growth nationally than a comparable rise in single-family homes because single-family housing multiplies consumer spending and job growth more, according to Diane Swonk, chief economist of Mesirow Financial.

“We tend to see more employment and spillover spending from owner than renters, but it is still a move in the right direction,” she blogged Tuesday.

Home owners tend to buy more furniture and home improvement products than apartment renters, for example. So the overall gain in construction, a sector the Federal Reserve keeps a close eye on as an indicator of the economy’s health, will impact spending, production and employment less than in the past.

The apartment surge is still a positive sign for job growth, but economists hope more renters will save enough for down payments or qualify for mortgages to buy homes. Rising rents may push renters onto the single-family housing market. According to the Labor Department, rents rose in July at their fastest pace in five years, a 3.3 percent rise from a year ago.