U.S. single-family starts surged in September, pointing to sustained housing market strength even as a drop in the construction of multi-family dwellings pushed overall home building activity to a 1-1/2-year low.

Groundbreaking on single-family housing projects, which accounts for the largest share of the residential housing market, jumped 8.1 percent to a 783,000-unit pace last month, the Commerce Department said on Wednesday. That was the highest level since February. A tightening labor market, which is steadily pushing wages higher, as well…