U.S. builders broke ground in August on the most houses in nine months, according to a Census Bureau report released today.

Privately owned housing starts in August were at a seasonally adjusted annual rate of 598,000, 1.5 percent above the July rate of 589,000. Still, the August total was 29.6 percent below the August 2008 rate of 849,000.

The seemingly positive sign for the housing market, however, is overshadowed by the first decrease since January in construction of single-family homes, according to the report. Single-family projects decreased by 3 percent, while there was a 35.3 percent increase in work on dwellings with five units or more.

The Midwest had a total of 114,000 starts in August, up 0.9 percent from July, but down 10.9 percent from August 2008.

The government’s tax credit for first-time buyers plus foreclosure-driven declines in prices boosted sales over the past months. The incentive is coming to an end, so builders may be cutting back on construction because they might not want to get caught with excess supply, Bloomberg reported.

Privately owned housing units authorized by building permits were at a seasonally adjusted annual rate of 579,000 for August, 2.7 percent above the July rate of 564,000. The rate, however, was 32.4 percent below the August 2008 rate of 857,000. Single-family authorizations in August were down 0.2 percent from July, while multifamily authorizations were up 15.8 percent.

Although the country had an increase in building permits from July, the Midwest decreased 5.7 percent.

See the full report.