U.S. builders began work on fewer homes than expected in August and new building permits fell, government figures showed Wednesday.

Housing starts, the number of new residential home or apartment construction projects that have begun during any particular month, rose 0.8 percent last month to a seasonally adjusted annual rate of 891,000 units, the U.S. Commerce Department said. Economists polled by Reuters had forecast construction starts in August to hit an annual rate of 896,000.

Construction of single-family houses rose 7 percent to a rate of 537,000 units. Work on multifamily homes, which include townhouses and apartment buildings, dropped 9.4 percent to an annual rate of 205,000. Overall starts in August were up 19 percent from the same period a year ago, suggesting a continuing rebound in the housing market.

Housing starts in the South rose 12 percent, while starts in the other regions fell.

Building permits, an indicator of future demand, declined 3.8 percent to a rate of 918,000, missing expectations of 954,000 units.

U.S. home builder sentiment remained in September at the highest level in almost eight years. On Tuesday, the National Association of Home Builders said its sentiment gauge held steady at 58 in September. Readings above 50 signal that builders, generally, are optimistic about sales trends.