WASHINGTON — Housing starts and permits fell in August, but upward revisions to the prior month’s data suggested the housing market continued to gradually improve.

Groundbreaking declined 14.4 percent to a seasonally adjusted annual 956,000-unit pace, the Commerce Department said on Thursday. July’s starts were revised to show a 1.12-million unit rate, the highest level since November 2007, instead of the previously reported 1.09-million unit rate.

Economists polled by Reuters had forecast starts slipping to a 1.04-million unit rate last month.

Housing is clawing back after suffering a setback following a spike in mortgage rates last year. It, however, remains constrained by a relatively high unemployment rate and stringent lending practices by financial institutions.

A survey Wednesday showed homebuilder sentiment hit its highest level in nearly nine years in September and builders reported a sharp pick-up in buyer traffic since early summer.

Groundbreaking for single-family homes, the largest part of the market, fell 2.4 percent in August to a 643,000-unit pace. That followed a hefty 11.1 percent increase in July.

Starts for the volatile multifamily homes segment tumbled 31.7 percent to a 313,000-unit rate in August.

Last month, permits fell 5.6 percent to a 998,000-unit pace. July’s permits were revised slightly up to a 1.06-million unit rate. Economists had expected them to slip to a 1.05-million unit pace in August.

Permits for single-family homes fell 0.8 percent to a 626,000-unit pace in August. Permits in the U.S. South, where more than half of single-family construction occurs, hit their highest level since April 2008.

Read more: Upbeat Signs for Housing Market, Even as Construction Slows

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