Contractors are getting more building permits and breaking ground on more homes as the U.S. housing market beefed up last month and helped improve the overall economy.

Groundbreaking on single-family homes in September rose by 6.3 percent in September to an annual rate of 1.02 million homes, according to a Reuters report based on data from the Department Commerce.

The September numbers showed an improvement on August, which suffered from a common late-summer slump but didn't reach the levels seen in July. Economists surveyed before the data was release said they expected growth smaller than the numbers showed.

"If you look at the trend, you are still seeing an upward trajectory," said Michelle Meyers, an economist at Bank of America Merrill Lynch in New York.

New starts for single-family homes, which is the largest part of the market, rose 1.1 percent in September, while the more volatile multifamily segment was up 16.7 percent. Permits increased 1.5 percent last month to a 1.02 million-unit annual pace.

September was the third month in 2014 in which new housing starts have eclipsed 1 million, according to a report from USA Today. In the years leading up to the housing bubble -- 2000-2006 -- U.S. homebuilders were averaging about 1.8 million housing starts per month.

Despite the increase in September housing starts, economists say they don't expect to see a substantial increase in the coming months.

"The report continued to show that the recovery in the housing market will likely remain gradual, as well as uneven," Royal Bank of Scotland economists said in response to the Commerce Department data.

Richard Moody, chief economist of Regions Financial, said that single-family housing starts have been fairly stable over the past year and that last month's increase in building permits doesn't suggest a big jump in housing starts.

"In the wake of the considerable volatility seen in the financial markets this week, the immediate reaction to the September construction data was a large sigh of relief," Moody said. "The details of the construction data, however, don't make us feel any more positive about the single family segment of the housing market, which continues to plod along at a frustratingly slow pace."